The annual inflation rate in Australia rose to 1.6 percent in the June quarter 2019 from a 2-1/2-year low of 1.3 percent in the previous period.
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The latest CPI reading was above market consensus of 1.5 percent, as food inflation hit its highest in near five years while transport prices picked up strongly.
Year-on-year, prices of food and non-alcoholic beverages increased by 2.4 percent in the second quarter, following a 2.3 percent rise in the prior quarter.
It was the highest food inflation since the September quarter 2014, amid further rises in prices of meat and seafoods (4.2 percent, the same as in Q1), dairy and related products (1.7 percent vs 1.2 percent), and fruits and vegetables (5.6 percent vs 5.8 percent).
In addition, transport prices picked up significantly (1.7 percent vs flat reading in Q1), of which automotive fuels (-0.5 percent vs -3.5 percent).
At the same time, prices of recreation and culture rose twice faster (1.8 percent vs 0.9 percent in Q1), with cost of clothing and footwear rebounding (0.2 percent vs -0.1 percent).
Meantime, inflation fell for alcoholic and tobacco (5.9 percent vs 6.4 percent); housing (0.5 percent vs 0.8 percent), mainly due to a sharp slowdown in cost of new dwelling purchase by owner-occupiers (0.2 percent vs 1.2 percent), while those of rents were stable (at 0.4 percent); health (3 percent vs 3.1 percent); education (2.8 percent vs 2.9 percent); and insurance and financial services (0.9 percent vs 1.1 percent).
Meanwhile, cost fell further for both communication (-4.4 percent vs -4.6 percent); and furnishings, household equipment and services (-0.4 percent vs -0.8 percent).
RBA Trimmed Mean CPI rose 1.6 percent year-on-year in the three months to June, the same pace as in the previous quarter and above market forecasts of 1.5 percent. Quarter-on-quarter, the index advanced 0.4 percent, following a 0.3 percent gain in the March quarter and matching market estimates. RBA Weighted Mean CPI went up 1.2 percent year-on-year, also the same as in the first quarter and in line with forecasts.
On a quarterly basis, consumer prices increased by 0.6 percent in the June quarter, after a flat reading in the previous three months and compared to expectations of 0.5 percent.
This was the strongest quarterly inflation rate in 1-1/2 years, amid higher oil prices, which flow through to consumers.
Automotive fuel rose 10.2 percent, returning to levels recorded in late 2018 and contributing half of the 0.6 percent rise this quarter.
In addition, prices rose for medical and hospital services (2.6 percent) and international holiday, travel and accommodation (2.7 percent).
Offseting the rise was falls in fruit (-4.1 percent), electricity (-1.7 percent) and domestic holiday, travel and accommodation (-1.5 percent). ■