Reporter's view: RBA will wait for full data on inflation
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Reporter's view: Economics correspondent Jennifer Duke writes that "economists are broadly upbeat about the November monthly inflation read as it’s giving them confidence rate rises might be over. There has been little change to the overall outlook for the first RBA meeting of 2024 on the back of this data, with most thinking the bank will keep rates on hold.
"But that isn’t to say it will be all smooth sailing from here. Monthly figures are volatile and, as BetaShares chief economist David Bassanese points out, this release is just partial data that’s skewed towards goods rather than services. Services inflation is what the RBA is particularly focused on as it has been taking longer to slowdown. To see the full picture requires the full quarterly dataset (released on 31 January).
"Housing continues to be a pain point right now. Rent was up 7.1% in the 12 months to November and new dwelling prices are up 5.5%. Some government measures have been helping take the edge off for households, though, including the Energy Bill Relief Fund and Commonwealth Rent Assistance."
CPI eases to 4.3% in November
The news: The consumer price index (CPI) rose 4.3% in the year to November, ABS figures show, which was slightly below expectations as price growth continues to cool.
The numbers: The figure was down from 4.9% in October and was the smallest annual increase since January 2022. Excluding volatile items such as fuel, green goods and holiday travel, prices increased 4.8% in the year to November, down from October's 5.1% figure. The biggest contributors to price growth were housing (+6.6%), insurance and financial services (+8.8%), food and non-alcoholic drinks (+4.6%), and alcohol and tobacco (+6.4%).
Electricity prices have increased 8.8% since June 2023, but would have increased by 19.0% over the same period without government rebates, the ABS said.
The context: The data comes nearly four weeks ahead of the Reserve Bank's first rates meeting of the year. The RBA will also have annualised December quarter CPI to consider by the end of the month, and how far inflation is from its target band of 2%-3% before it makes its next decision on interest rates.
The source: ABS Media Release
