Inflation at 2.4 per cent
Monthly inflation was a bit higher than expected in April, rising +0.8 per cent for the month, according to the ABS.
The first month of this quarter often sees a bit of a jump in prices reported, and this month's increase was largely accounted for by an unwinding of electricity prices in Queensland.
The headline rate of inflation over the year was steady at +2.4 per cent for a third consecutive month, slightly higher than the median market forecast for 2.3 per cent.
The trimmed mean rate of inflation has also been largely steady for the past five months, rising slightly to 2.8 per cent over the year to April (which is within the 2 to 3 per cent target band).
Source: ABS
Compared to international peers, Australia is tracking reasonably well.
The UK saw its inflation rate jump in April (energy, again), while Canada dropped to just 1.7 per cent.
It was good to see Australia's cost of constructing new dwellings saw inflation fall to 1.2 per cent over the year to April, the lowest level in 4 years, since this was one of the key drivers of the inflation cycle alongside rents (where inflation is also easing).
Looking ahead, although Australia's headline rate of inflation might poke its head above the 3 per cent level again temporarily as cost of living subsidies are unwound, core inflation is now expected to stay within the target band.
This gives the central bank some nice optionality to cut interest rates in July if required, or not...and bond yields weren't too much moved by today's news.
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