Australian consumer prices rose by 0.6% in the third quarter and were up 1.8% from a year earlier, the Australian Bureau of Statistics said Wednesday.
Economists had expected consumer prices to rise 0.8% in the quarter and 2.0% from a year earlier. The Reserve Bank of Australia targets an inflation rate of between 2% and 3%.
Continue Reading Below
Core inflation rose by an average of 0.4% in the quarter, compared with the 0.5% rise expected by economists.
The biggest contributors to the result were electricity and tobacco prices, while vegetables and automotive fuels pulled down the outcome.
Inflation remains well short of the level that might prompt the central bank to raise interest rates. Record low wages growth continues to anchor down inflation, and economists and policymakers don't expect the situation will change any time soon.
Earlier Wednesday, Treasury Secretary John Fraser told parliament he remains confident wages growth will eventually accelerate as unemployment falls, but he also stressed that it "will take some time."
"As the cyclical constraints that have weighed on the economy recede, wages growth will accelerate. This will be assisted by inflation and inflationary expectations moving higher," he added.
Australia has experienced rapid jobs growth this year, but plenty of spare capacity remains in the labor market, and wages growth is expected to remain weak for some time yet, keeping interest rates low.
The RBA has kept its benchmark interest rate on hold at a record low 1.5% for over a year, with most economists expecting it will remain sidelined until late 2018. The RBA has signaled it has no wish to follow the lead of other central banks such as the U.S. Federal Reserve and the Bank of Canada that have raised rates.
-Write to James Glynn at email@example.com
(END) Dow Jones Newswires
October 24, 2017 20:50 ET (00:50 GMT)