Australia inflation gauge shows broad slowdown in Sept:TDMI

[SYDNEY] A private gauge of Australian price pressures showed inflation at its slowest in almost a year in September amid a broad moderation in goods and services costs.

The TD Securities-Melbourne Institute's monthly measure of consumer prices edged up 0.1 per cent in September, following an unchanged outcome in August. TD said July's increase of 0.2 per cent was revised to a flat reading due to the abolition of a carbon tax.

The annual pace of inflation slowed to 2.2 per cent, compared to 2.5 per cent in August and a marked deceleration from a peak of 3.0 per cent in June.

That was the lowest reading since October last year and near the floor of the Reserve Bank of Australia's (RBA) long term target band of 2-3 per cent.

The RBA holds its October policy meeting on Tuesday and is considered certain to leave interest rates at 2.5 per cent, where they have been since it last cut in August 2013.

The gauge suggested the official measure of consumer prices (CPI) might rise by only 0.4 per cent for the entire third quarter. Such a soft outcome would pull the annual pace down to 2.2 per cent, from 3.0 per cent in the second quarter.

Monday's survey showed price rises for fruit and vegetables, tobacco and holiday travel and accommodation. These were offset by falls in health, petrol and clothing and footwear.

Various measures of underlying inflation were also muted. The trimmed mean rose 0.1 per cent in September, after slipping 0.1 per cent in August. The annual pace slowed to 2.3 per cent, down from a top of 3.1 per cent back in April.

Inflation excluding fuel, fruit and vegetables increased by 0.2 per cent in the month, and ran at 2.0 per cent for the year.

The slowdown suggested that a high reading recorded for the RBA's trimmed mean measure of inflation in the second quarter was an aberration and not the start of a trend.

Prices for tradable goods and services grew at an annual pace of 1.7 per cent in September, down from 1.9 per cent in August.

There was also an unusual slowdown in prices for the non-tradables sector, where inflation has been stubbornly high for years. Annual inflation slowed to just 2.6 per cent, compared to a high of 3.4 per cent earlier in the year. - Reuters


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