Australia's August Inflation Cools More Than Expected as Core Measure Eases

Australian consumer price inflation came in softer than expected in August, with both the headline and core measures undershooting forecasts, according to data released by the Australian Bureau of Statistics on Wednesday.

The monthly consumer price index rose 0.4% in August compared with July, a slower pace than the 1.0% jump recorded in the previous month. Economists had anticipated a 0.5% gain. Despite the monthly slowdown, the annual rate accelerated to 4.0%, up from 3.5% in July.

Underlying price pressures also proved milder than predicted. The trimmed mean measure of core inflation, which strips out volatile items, increased 0.2% over the month against forecasts of 0.3%. On an annual basis, the core rate stood at 3.6%.

The softer readings were driven by a rise in fuel prices that was partly offset by declines in clothing and travel costs.

The data arrived a day after the Reserve Bank of Australia raised interest rates, a move made in anticipation of a stronger inflation outcome. The central bank has left the door open to further tightening if economic conditions require it.