Inflation increased 4% in May
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The news: The monthly consumer price inflation indicator rose 4% in the 12 months to May 2024, marking the third month in a row with an increase in the annual figure.
The numbers: Economists were largely expecting inflation to hit 3.8%, up from 3.6% in April. The biggest contributors to the increase were housing, up 5.2%, food and non-alcoholic beverages, up 3.3%, transport, up 4.9%, and alcohol and tobacco, up 6.7%.
One positive out of the figures was that, on an underlying basis, inflation decreased to 4% from 4.1% in April. This figure strips out holiday travel and other volatile categories.
The context: Economists and the Reserve Bank will be looking much more closely at the more comprehensive quarterly indicator due to be published at the end of July, but this monthly read is an important datapoint. Inflation has been stickier than the central bank would like, a problem being seen in many economies globally, and markets are now expecting the first RBA rate cut to come in April or May next year.
What they said: "The introduction of the Energy Bill Relief Fund rebates from July 2023 has mostly offset electricity price rises from annual price reviews in the same month. Excluding the rebates, Electricity prices would have risen 14.5 per cent in the 12 months to May 2024," said Australian Bureau of Statistics head of prices statistics Michelle Marquardt.
The source: Australian Bureau of Statistics
