Headline inflation remains at its lowest level in more than three years, but fundamental data are still struggling to get into the Reserve Bank’s target range. The latest monthly data released by the Australian Bureau of Statistics showed that the consumer price index was 2.1% in October, the same as in September and lower than economists expected. This figure was lower than 2.7% in August and the lowest level since July 2021.
Headline inflation remains at its lowest level in more than three years. (Luis Enrique Ascui/The Age) Energy rebates and falling fuel prices have again helped keep headline inflation at the lower end of the RBA’s target range. However, one of the key measures of underlying inflation – the trimmed mean – actually rose slightly to 3.5 per cent, still above the 2 to 3 per cent target. “Lower electricity and fuel prices had a significant impact on the annual CPI measure this month,” ABS head of price statistics Michelle Marquardt said.“When prices of some goods fluctuate significantly, underlying inflation measures such as the CPI and trimmed mean, which exclude volatile goods and holiday travel, can give us further insight into inflation trends.” Annual trimmed mean inflation was 3.5%, up from 3.2% last month and similar to August’s level. “However, another underlying inflation measure fell again. “The CPI, which excludes volatile goods and holiday travel, was 2.4% in the 12 months to October, down from 2.7% in September,” Marquardt said. With the trimmed mean rising to its highest level since July, today’s inflation data is highly unlikely to lead to a rate cut at the Reserve Bank’s last meeting of the year in two weeks. The RBA usually places more weight on quarterly data, and the next quarter’s data will not be released until the end of January.
