ONLY CHARTS #356

Aus monthly CPI, Aus Q1 engineering construction

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1. Australia’s monthly CPI fell 0.4% m/m in May and year-ended inflation was much softer than expected at +2.1% y/y.

Larger-than-expected falls for volatile items - fruit & holiday travel - accounted for all of our forecast ‘miss’. Insurance and new dwelling purchase inflation were also weaker than expected (see below).

The CPI was unchanged in seasonally adjusted terms.

2. Australia’s monthly trimmed mean inflation slowed +0.4ppts in year-ended terms to +2.4% y/y in May.

This is different to the trimmed mean measure based on quarterly CPI data, including because it is ‘trimmed’ at the annual level.

While the May trimmed mean outcome is tracking broadly in line with the RBA’s May SMP forecast, this monthly measure was also well below the quarterly trimmed mean outcome for Q1.