The August monthly consumer price index (CPI) in Australia stood at 5.2% year-on-year (y/y), meeting expectations and showing a slight increase from the previous month’s 4.9%. On a month-on-month basis (m/m), the CPI rose by 0.6% compared to 0.3% in July. However, when looking at core measures, which exclude categories such as fruit and vegetables, automotive fuel, and holiday travel and accommodation, the y/y inflation rate was 5.5%, lower than the 5.8% recorded in July. This decline in underlying inflation is likely to be viewed favorably by the Reserve Bank of Australia (RBA). The trimmed mean CPI, which serves as another measure of core inflation, stood at 5.6%.
The August CPI figures in Australia largely met expectations, with an overall y/y inflation rate of 5.2%. Although this represented a slight increase from the previous month, the m/m rise accelerated to 0.6%. However, the core measures, which exclude volatile categories, such as fruit and vegetables, automotive fuel, and holiday travel and accommodation, indicated a lower y/y inflation rate of 5.5%, down from 5.8% in July. This decline in underlying inflation will likely be perceived as positive by the RBA, as it suggests a potential moderation of price pressures. The trimmed mean CPI, another measure of core inflation, also showed a similar trend with a reading of 5.6%.
The RBA is likely to welcome the slight easing of underlying inflation in Australia in August. While the overall CPI rose slightly y/y, the core measures, excluding the impact of volatile categories, indicated a lower inflation rate of 5.5%. This decline suggests a potential moderation of price pressures and may provide some relief to the central bank. The trimmed mean CPI also stood at 5.6%, further supporting the notion of a slight decline in underlying inflation. These figures will likely be taken into consideration by the RBA in their monetary policy decisions and may influence their stance on interest rates and other measures aimed at managing inflation.