Monthly inflation plunges

After April’s monthly inflation head fake, May has crashed back to earth. The expected was 6.1%, and we got 5.6%. Via the ABS.

The monthly CPI indicator rose 5.6% in the twelve months to May.
The most significant price rises were Housing (+8.4%), Food and non-alcoholic beverages (+7.9%) and Furnishings, household equipment and services group (+6.0%).
Offsetting the rise was Automotive fuel (-8.0%).

CPI analytical series
Seasonally adjusted	6.6	6.9	5.8
CPI excluding volatile items** and holiday travel	6.9	6.5	6.4
Annual Trimmed mean	6.5	6.7	6.1

Goods and recreation deflating at a good clip now. The problem is sticky Alboflation in energy, food and houses. Financials going the gouge now too:

Given the RBA was so torn at the last meeting, this is probably enough for pause.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.