Inflation down but not out

Stats NZ reported:

New Zealand’s consumers price index increased 3.3 percent in the 12 months to the June 2024 quarter, according to figures released by Stats NZ today.

While it is good to see inflation coming down, I would be wary of concluding the job is done, when you look at non-tradeables vs tradeables.

Tradeable inflation has fallen from 5.2% a year ago to 0.3%. This is the global impact. In fact it has fallen for the last three quarters.

Non-tradeable inflation is still at a high 5.4%. Only down a bit from 6.6% a year ago. Now the quarterly figure was a more modest 0.9% which is a more tolerable level. However I’d be tempted to wait until we get the Sep 24 quarter inflation before cutting interest rates.