Mar CPI rose 0.2%. Food prices posted a rare fall in March, offsetting some of the 1.1% rise in energy prices (3.9% rise in gasoline). The core CPI was also up 0.2%, with a further rise in clothing, autos and other imported (or import competing) prices to early to reflect pass-through of the recently weaker USD. Services prices ex energy rose 0.2%, with rents up 0.3%, medical care up 0.4% but transport prices flat, weighed down by post-Easter airfare discounting. The PPI suggests food prices remain soft but Department of Energy reports show gas prices rising again in April. Weak core outcomes are typically due to one or more of autos, clothing, tobacco, rents or medical care either falling or posting below trend gains. With the dollar weaker and airfares unlikely to fall again, Westpac expects the third straight month of 0.2% gains for both headline and core CPI.
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