Australian inflation: CPI slows to 2.1 per cent in May in sign of easing cost-of-living pressures
Australian inflation has dipped to 2.1 per cent in the year to May, a figure that would boost hopes that further interest rate relief will be on the way within months.
That was down from 2.4 per cent in the previous month, according to Australian Bureau of Statistics data released on Wednesday morning.
Core inflation — which strips out volatility — was also lower, at 2.4 per cent for the year to May.
The Reserve Bank will brush off the monthly data as it provides only a partial guide to inflation, preferring the fuller snapshot published every quarter.
But it does give an early indication of where inflation is heading.
Markets were heavily betting on an interest rate cut when the RBA board meets in the second week of July, with the chances of relief tipped at more than 85 per cent.
Yet the central bank may prefer to take it slow and wait until August before lowering rates for the third time this year.
Treasurer Jim Chalmers on Tuesday warned the monthly figure was 'notoriously volatile' and 'bounces around a bit'.
He predicted the number would be in the RBA's target band of 2 to 3 per cent.
The central bank will also need to weigh up the threats to economic growth and the potential impact on jobs.
Economic activity was sluggish in the March quarter and international chaos caused by President Donald Trump's trade war and the more recent conflict in the Middle East will add to the pressure.
The jobs market also had a soft May with the number of Australians in work falling slightly.
Offshore, Federal Reserve chair Jerome Powell told US Congress overnight that he would be in no rush to cut that country's interest rates given the potential inflationary impact of tariffs levied on imports by Mr Trump.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Age
33 minutes ago
- The Age
Neil Perry to replace Song Bird with Italian restaurant
'With Song Bird, we missed the mark by creating a three-level Chinese restaurant in Double Bay. Now, we've got the size right over two levels, and – just as importantly – acoustics that have finally been tamed, we're ready to move forward into a new future,' said Perry in a statement. 'The change to Gran Torino will be a better fit with Margaret, and the more approachable menu and laidback setting will have people wanting to return time and time again for drinks, casual bites, and celebrations.' After the initial success of Margaret and its sibling venues Next Door and Baker Bleu, Perry seemingly couldn't put a foot wrong in Double Bay. But the next step in the 'Perryfication' of the exclusive suburb proved to be more challenging. Perry and his team splashed $13 million on the four-level Neville Gruzman building on Bay Street that housed Song Bird and Bobbie's jazz bar. Last month Perry closed Bobbie's, a joint venture with New York-based Australian bar tsar Linden Pride, and relinquished the top floor of Song Bird, which was used for functions. Perry said at the time: 'Song Bird is absolutely not closing.'
AU Financial Review
39 minutes ago
- AU Financial Review
Markets asleep at the wheel as tariff D-Day looms
With just two weeks to go before US President Donald Trump's global tariffs deadline, financial markets are clinging to the hope of further delays as countries try to hash out a deal with America. But strategists are warning of 'complacency' in the market with investors underestimating the potential for a more punitive outcome, leaving both the Australian dollar and the sharemarket vulnerable to a sell-off.
News.com.au
an hour ago
- News.com.au
Closing Bell: Banks lead ASX recovery as CPI softens to 2021 levels
May CPI reading comes in soft at 2.1pc Low inflation prompts banking stock rally, lifting financials Banks and financials prop up flailing ASX, pulling market back into positive The ASX 200 recovered from a midday slump to add just 3.7 points or 0.04% today. The recovery came after May's inflation reading came in soft, prompting a rally in the financial sector. More on that in a moment. The ASX 200 Resources (-1.3%) and ASX All Ord Gold (-2.2%) indices weighed heavily on the bourse, with several of the larger gold miners floundering. Emerald Resources (ASX:EMR) fell 10.3%, Pantoro (ASX:PNR) 4%, Capricorn Metals (ASX:CMM) 4.7%, Perseus Mining (ASX:PRU) 3.4% and Northern Star Resources (ASX:NST) 2.3%. RBA expected to cut rates in July as inflation falls Australian consumers can breathe a sigh of relief as inflation continues to cool in the lucky country, falling to 2.1% over the year to May and 2.4% in terms of annual trimmed mean, a measure of underlying inflation. That's the lowest inflation rate we've experienced since November 2021, when half the world was in lockdown to tackle the Covid-19 pandemic. What does it mean? For one, the chance of the Reserve Bank cutting rates in July is getting pretty close to certain – the market is pricing an 88% probability at this stage. "Today's figures show the RBA is tantalisingly close to being declared the winner in its fight against inflation. Headline inflation dropped to 2.1% year on year in May,' Oxford Economics Australia economic analyst Ivy Yu said. Yu reckons the rate cut is a strong possibility in July, but given the RBA prefers the more detailed quarterly CPI data, that cut could be pushed back to August. 'But the evidence is clear now; inflation is in a better position than expected, so there's no need to wait – especially when household spending is sluggish and global events rattle confidence." Our seven major banking stocks moved higher on the news, adding between 0.64% and 1.75% while the ASX 200 Banks index climbed 1.35%. ASX SMALL CAP LEADERS Today's best performing small cap stocks: Security Name Last % Change Volume Market Cap OVT Ovanti Limited 0.008 167% 3.19E+08 $9,016,545 RLC Reedy Lagoon Corp. 0.002 100% 5227468 $776,707 FTC Fintech Chain Ltd 0.003 50% 420464 $1,301,539 TEG Triangle Energy Ltd 0.003 50% 3781571 $4,178,468 ATR Astron Corp Ltd 0.65 49% 175974 $90,991,450 SRJ SRJ Technologies 0.007 40% 3865016 $3,027,890 OLY Olympio Metals Ltd 0.11 38% 2611992 $7,045,384 HCD Hydrocarbon Dynamics 0.002 33% 2466797 $1,617,164 MGU Magnum Mining & Exp 0.004 33% 172779 $3,364,953 IFG Infocusgroup Hldltd 0.014 27% 4400737 $3,035,580 EVG Evion Group NL 0.019 27% 2289821 $6,523,800 NHE Nobleheliumlimited 0.03 25% 2352993 $14,388,600 ADG Adelong Gold Limited 0.005 25% 1863202 $8,274,707 AN1 Anagenics Limited 0.005 25% 105000 $1,985,281 OMG OMG Group Limited 0.005 25% 1721869 $2,913,180 PKO Peako Limited 0.0025 25% 746857 $2,975,484 LIS Lisenergylimited 0.115 24% 6354283 $59,538,621 TGH Terragen 0.021 24% 560 $8,585,292 AHN Athena Resources 0.008 23% 2559163 $14,728,721 ZMM Zimi Ltd 0.011 22% 84220 $3,847,894 BPH BPH Energy Ltd 0.009 20% 3048217 $9,136,746 RBX Resource B 0.03 20% 429237 $2,879,612 DTI DTI Group Ltd 0.006 20% 182964 $4,147,098 FRX Flexiroam Limited 0.006 20% 200019 $7,586,993 OLI Oliver'S Real Food 0.006 20% 2846964 $2,703,660 Making news… Ovanti (ASX:OVT) has brought ZIP Co (ASX:ZIP) executive Peter Maher onto the board as CEO of the company's buy now, pay later division in the US. Maher is current USA head of enterprise merchant partnerships at ZIP, with extensive experience in commercial expansion, enterprise growth and platform integrations in North America. He'll be leading the company's US market entry strategy, managing commercial partnerships, platform activation and consumer product launch. Reedy Lagoon (ASX:RLC) has drummed up a set of drilling targets at the Burracoppin gold project with a combination of magnetic and soil sampling data. The company will be drill testing four prospects – Lady Janet, Windmills, Shear Luck and Zebra – in its quest for gold, with the target zones stretching up to 800m in strike length. Astron Corporation (ASX:ATR) has gotten a tick of approval for a work plan from the Victorian government for the Donald rare earths and mineral sands project, taking it a step closer to a final investment decision. ATR wants to fill the gap in rare earths supply for the US, responding to export restrictions from China. If the project goes ahead as planned, feedstock from Donald will be shipped to a mill in Utah to be processed into separate oxides for domestic North American customers and beyond. Evion Group (ASX:EVG) has locked in a $400,000 order to supply a leading US-based graphite supply chain company with 80 metric tonnes of expandable graphite from its Panthera JV project in India. EVG is in talks with several other potential offtake partners in the US, Europe and Asia, as an ex-Chinese source of expandable graphite. The company reckons this order is just the first of many, as demand from US industries grows. Adelong Gold (ASX:ADG) has tapped experienced geologist Luke Olson as exploration manager, beginning July 1. Olson most recently worked on the Lauriston and Apollo gold projects, both of which are now owned by ADG. The company is looking to ramp-up exploration across its Victorian gold portfolio and will be keen to leverage his local expertise. ASX SMALL CAP LAGGARDS Today's worst performing small cap stocks: Security Name Last % Change Volume Market Cap AUK Aumake Limited 0.002 -33% 16655 $9,070,076 AXP AXP Energy Ltd 0.001 -33% 660000 $10,027,021 JAY Jayride Group 0.001 -33% 64010 $2,141,834 QXR Qx Resources Limited 0.002 -33% 621887 $3,930,987 RAN Range International 0.001 -33% 2836500 $1,408,935 PV1 Provaris Energy Ltd 0.012 -29% 4115559 $11,866,022 SHE Stonehorse Energy Lt 0.005 -29% 1381 $4,791,046 X2M X2M Connect Limited 0.019 -27% 3058223 $10,092,728 BP8 Bph Global Ltd 0.0015 -25% 29225 $2,101,969 HLX Helix Resources 0.0015 -25% 2542854 $6,728,387 VFX Visionflex Group Ltd 0.0015 -25% 7034438 $6,735,721 BVR Bellavistaresources 0.255 -24% 17071 $33,795,656 VAR Variscan Mines Ltd 0.007 -22% 1974500 $7,045,719 MIO Macarthur Minerals 0.015 -21% 105992 $3,793,645 OLH Oldfields Holdings 0.02 -20% 40500 $5,326,478 ANX Anax Metals Ltd 0.004 -20% 6554760 $4,414,038 CYQ Cycliq Group Ltd 0.002 -20% 1922500 $1,151,292 EAT Entertainment 0.004 -20% 75231 $6,543,930 FIN FIN Resources Ltd 0.004 -20% 899998 $3,474,442 KPO Kalina Power Limited 0.004 -20% 7946031 $14,664,978 LMG Latrobe Magnesium 0.008 -20% 5633324 $26,265,900 MEL Metgasco Ltd 0.002 -20% 179775 $4,581,467 OEL Otto Energy Limited 0.004 -20% 10745371 $23,975,049 SHP South Harz Potash 0.002 -20% 2476679 $2,756,822 AR9 Archtis Limited 0.165 -20% 2029116 $59,033,266 IN CASE YOU MISSED IT Trek Metals (ASX:TKM) has secured a diamond rig to carry out deeper drilling in parallel with RC drilling at its Christmas Creek gold project. Break it Down: Astral Resources (ASX:AAR) has completed a PFS for its Mandilla gold project, highlighting strong economics amid a record gold price. Greenvale Energy (ASX:GRV) is setting the stage for maiden drilling at its Oasis uranium project in Queensland where historical exploration had demonstrated continuous, high-grade mineralisation. A thorough surface geochemistry review at Future Battery Minerals' (ASX:FBM) Miriam project has identified 15 distinct gold anomalies and revealed an emerging 1.75km gold trend. Stocktake: Indiana Resources (ASX:IDA) will pay out its shareholders 5 cents a share, after an ATO ruling that will make the cash return tax free. Taruga Minerals (ASX:TAR) is expanding its exploration plans at its new Thowagee project in the Gascoyne region of WA on the trail of gold, lead and silver trends. TRADING HALTS
