Tweet of the day: Inflation slightly above consensus
The Australian inflation rate figures have been released showing a 0.4 percent increase in the December quarter 2015, or 1.7 per cent year-on-year.
The consumer price index data, released by the Australian Bureau of Statistics, also showed underlying inflation slightly higher than expected, at 0.6 per cent for the December quarter, or 2.1 per cent year-on-year.
The Consumer Price Index increase follows a rise of 0.5 percent in the September quarter 2015 according to the Australian Bureau of Statistics.
The most significant price rises in the latest quarter were in tobacco (+7.4 percent), domestic holiday travel and accommodation (+5.9 percent) and international holiday travel and accommodation (+2.4 percent).
The rises were partially offset by falls in automative fuel (-5.7 percent), telecommunication equipment and services (-2.4 percent) and fruit (-2.6 percent).
The increase of 0.1 percent for the housing group is the weakest movement since March quarter 1998 as prices rise for rent (+0.2 percent) and new dwelling purchase by owner occupiers (+0.1 percent) have been subdued through the quarter.
The 0.1 percent rise for new dwelling purchase by owner occupiers is the weakest movement since March quarter 2014.
The CPI rose 1.7 per cent through the year to the December quarter 2015, following a rise of 1.5 per cent through the year to the September quarter 2015.
AFR contributor Christopher Joye was one of the first to take to twitter, as Commsec and Stephen Koukoulas tweeted the increase in the Australian dollar.
Craig James at Commsec noted inflation "remains in Goldilocks territory – not too hot, not too cold, but broadly just right."
He advised it was pretty clear that inflation is not a threat to the domestic economy, meaning that the Reserve Bank can comfortably keep interest rates at exceptionally low levels over the medium term.
"Domestic inflationary pressures remain well contained and given the slow growth in wages it is unlikely to result in a change to the domestic inflation landscape. In addition the ongoing slide in oil prices will offset any lift in imported inflation due to the weaker Australian dollar.
"The headline inflation measure rose by a mildly larger-than-expected 0.4 per cent in the December quarter.
"And while the underlying measures were also mildly higher than expectations, the annual growth rates were at the low end of the Reserve Bank’s 2-3 per cent target band. The average of the three key underlying inflation measures lifted by 0.6 per cent in the quarter to be up 2.0 per cent over the year."
"And while the door remains ajar when it comes to the likelihood of another rate cut, CommSec expects the Reserve Bank to keep rates on hold over 2016."