For 4th Quarter
Latest Release Provided by: Australian Bureau of Statistics

CPI q/q: 0.4%, forecast 0.8%, pr. 0.8% (3Q)
CPI y/y:   2.7% , forecast 3.0%, pr. 2.8% (3Q)

RBA Trimmed Mean q/q:  0.3%,  forecast 0.7%, pr. 0.6% (3Q)
RBA Trimmed Mean y/y:   2.2%,   forecast 2.6%, pr. 2.5% (3Q)

RBA Weighted Median q/q:  0.5%,  forecast 0.7%, pr. 0.5% (3Q)
RBA weighted Median y/y:  2.3%,   forecast 2.5%, pr. 2.3% (3Q)

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Australia's headline consumer price index (CPI) rose 0.7% in the 3rd quarter, for an annual rate of 2.8%. Consumer prices were expected to rise 0.8% for the 4th quarter, and a 3.0% annual rate, which would mean a pick up in inflation and put prices at the upper part of the RBA's target range. Instead we saw inflation climb only 0.4% on the quarter, and cool to an annual rate of 2.7%. That will ease pressure on the RBA to raise rates this year.

When the 3rd quarter figures were released, the question at the time was whether the RBA would raise rates to 4.75%, which they wound up doing. However now, economists are pushing further out any RBA increases. Inflation expectations jumped among consumers, but will it show up in the data? The weaker report means the RBA is sidelined in terms of any rate hikes in the near term.

From Bloomberg: Australian Consumer Prices Advance at Slowest Pace in Two Years

Australian consumer prices advanced last quarter at the slowest pace in almost two years as a stronger currency lowered costs for household appliances, clothing and cars from abroad.

The local dollar dropped as investors bet Reserve Bank of Australia Governor Glenn Stevens has scope to delay raising interest rates after seven increases from October 2009 to November last year. Weaker prices at the end of 2010 may be short lived as reconstruction after floods in eastern Australia adds to wage pressure, economists said.