Australian Inflation Rises Modestly in Fourth Quarter

By FeaturesDow Jones Newswires

Australian consumer prices rose 0.6% in the fourth quarter of 2017, and were up 1.9% from a year earlier, the Australian Bureau of Statistics said Wednesday.

Economists had expected consumer prices to rise 0.7% in the quarter and 2.0% from a year earlier.

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Core inflation rose by 0.4% in the quarter, compared with the 0.5% expected by economists. Core inflation was 1.9% higher from a year earlier.

The main contributors to the rise in consumer prices during the quarter were fuel costs, tobacco, domestic travel and fruit, offset by lower costs for international travel, computers and telecommunications.

The data suggests price pressures are not yet building at a pace that is likely to see a policy shift at the Reserve Bank of Australia. The RBA targets inflation between 2-3% on year.

The central bank has held official interest rates at a record low 1.5% since August 2016, with markets predicting it'll remain on the sidelines until the second half of 2018, if not longer.

Missing from the inflation mix is wages growth, which has been mired around record lows. Recent labor market data suggests there is as yet little evidence of a rekindling of income pressures.

-Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

January 30, 2018 19:53 ET (00:53 GMT)

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