This via Benjamin Picton, Senior Strategist, Australia & NZ economics and markets for Rabobank in Sdyney:
If there is a bright spot in the RBA's fight against sticky high inflation, and Australia can avoid further rate hikes, its that the latest indication is the inflation rate is dropping:
- Australian private survey of inflation, May 2024: +0.3% m/m (prior +0.1%) ... y/y was +3.1% (lowest in 21 months)
The data in that post is NOT official CPI data, far from it, but if the May monthly inflation data from the Australian Bureau of Statistics (due Wednesday 26 June) heads down towards 3.0% (the top end of the RBA target band for inflation) that'll be helpful for avoiding further rate hikes. The April monthly reading was a sticky high 3.6%. An argument that supports the call for further rate hikes from the RBA is that the unemployment rate is still low. Its an awful thing to say, I hate folks losing employment, but if the RBA chooses to sacrifice a rise in the jobless rate in its fight against inflation it'll see space to do so.
