Inflation transitory and sagging
Headline inflation came in at 0.8 per cent for the second quarter, taking the annual pace up to 3.8 per cent... an apparently hefty figure which will likely capture the, erm, headlines.
But the inflation is likely to be transitory; and context is also important.
Basically with an outlying figure dropping off the annual measurement, the high headline figure is largely due to the base effect.
Looked at another way, inflation has effectively been running some way below target for about half a decade and counting.
The core inflation measures came in at 1.63 per cent and 1.67 per cent for the financial year, with the quarterly prints as follows:
Therefore, the underlying rate of inflation quickened a little, but remained below the 2 to 3 per cent target, as has been consistently the case since 2015.
The wrap
Overall, there was some inflation in food, fuel, and furnishings, but with half of the Aussie population once again being impacted by restrictive lockdowns in Q3, the outlook for inflation has already shifted considerably.
QE looks set to continue at the current pace for the remainder of the year, rather than any tapering coming into play.
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More credible detail on the inflation figures as always from data king James Foster here.
