Key insights
- Australian CPI cooled slightly in February to 3.7%, but underlying inflation remains sticky, with trimmed mean CPI at 3.3%. Housing and electricity costs are major contributors. The RBA is expected to maintain a hawkish stance. This reinforces the global trend of persistent inflation, potentially influencing the Fed's decisions, albeit indirectly, leading to a slightly bearish sentiment for US equities.
Investing.com-- Australia’s consumer inflation eased slightly in February, while underlying price pressures remained sticky, data from the Australian Bureau of Statistics showed on Wednesday, supporting expectations that the central bank will remain cautious on policy.
The consumer price index (CPI) rose 3.7% in the 12 months to February, down from January's rise and market expectations of 3.8%.
On a quarterly basis, CPI rose 0.6% in the first quarter.
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Measures of core inflation, closely watched by policymakers, pointed to persistent price pressures.
The trimmed mean CPI rose 3.3% year-on-year in February, compared to 3.4% rise in the previous month, while the weighted median measure edged down to around 3.5% from 3.6%.
Housing remained the largest contributor to annual inflation, rising 7.2% over the year, driven by higher electricity costs, rents, and new dwelling prices. Electricity prices surged 37% annually, reflecting the impact of households exhausting government rebates.
Food and non-alcoholic beverages prices rose 3.1% from a year earlier, with takeaway meals and red meat prices recording notable increases.
By contrast, transport costs fell 0.2% on the year, as automotive fuel prices declined 7.2%, although recent geopolitical tensions have clouded the outlook.
ABS head of prices statistics Sue-Ellen Luke said annual inflation had “eased slightly” in February, while underlying inflation remained steady.
The data reinforced expectations that policymakers will keep interest rates higher for longer as they seek to return inflation to target.