Australian inflation accelerates, keeping the rise of various rates in play

Australian inflation accelerates, keeping the rise of various rates in play

Australia’s monthly inflation gauge acceleratedreflecting global trends amid higher oil prices, rstrengthening the case for the Reserve Bank go up at least one more time.

The consumer price indicator increased 5.2% in August compared to the previous year, matching economists’ estimates, Australian Bureau of Statistics data showed on Wednesday. The result contrasts three months of slowdown in the pace of price increases and will be the focus of the new RBA governor, Michele Bullock, who will chair her first board meeting next week.

The RBA has gone into data-dependent mode after raising interest rates 12 times from May 2022 to 4.1%. It has paused in the last three meetings, reflecting cooling consumer prices. The Australian dollar and policy-sensitive three-year bond yields were little changed in response to the CPI.

Wednesday’s report showed that, when excluding volatile elements, Annual inflation decreased from 5.8% to 5.5%.

The data justifies the RBA’s stance that further tightening may be necessary and that it is too early to claim victory against inflation. Australia has moved more cautiously in this cycle than its counterparts, their increases of four percentage points compare with 5.25 in New Zealand and the United States.

Wednesday’s report comes after core U.S. consumer prices in August marked their first acceleration in six months, adding to concerns that renewed momentum in the economy was reigniting pressure on consumers. prices. The Federal Reserve will receive the next set of inflation data on September 29.

Today’s report is one of the last major data Bullock will see before Tuesday’s meeting, when authorities are expected to keep rates steady.

The RBA has been on pause since July to assess the impact of its tightening campaign amid a mixed economic outlook: Consumers have slowed spending as they are forced to allocate an increasing proportion of their income to mortgage payments, while corporate confidence still holds.

The labor market is also tight, Hiring remained strong and the unemployment rate remained in a range of 3.5%-3.7% over the past year.

Today’s quarterly CPI report also showed:

The factors that contributed the most to the annual increase in August were housing, with an increase of 6.6%, transportation, up 7.4%, and food and non-alcoholic beverages, which increased 4.4%. Automobile fuel prices increased 13.9% compared to 12 months ago. In monthly terms they rose 9.1%. The trimmed annual average indicator, another basic measure, was stable at 5.6%.

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