The trimmed mean reading inched higher to 1.9% y/y, but the devil is in the details
Eamonn had the report earlier here.
Inflation is gradually and slowly inching back up to the RBA's target band of 2% to 3%, but it remains at a snail's pace rather than a kangaroo hopping.
But the RBA can take comfort from the fact that inflation isn't rising too rapidly that it puts major pressure on households just yet. That will help to hold up economic growth for the time being, though signs are still not looking all too bright.
The pattern in the inflation report mimics a similar pattern in household consumption. Drilling into the details, the biggest price rises in the quarter were from education, gas and other household fuels, and pharmaceutical products. Majority of these items are necessities and goes to show what consumers are actually spending on - if you want to go by the law of demand and supply.
Meanwhile, the most significant falls were from travel and accommodation, AV and computing media and services, and furniture. Which in the broad sense are more luxury items, and the drop in prices here offers the sense that the consumer is not readily spending on these items.
While you can also argue about the fact that retail competition is getting stronger in the country - depressing prices for tradable goods, that also only serves to add to the fact that inflationary pressures will not spring up in the coming quarters as well.
Put together, it's going to take a whole lot more to change the RBA's outlook on the cash rate. And at the moment, I still don't see a reason why 2018 will be the year for the RBA to move.
