Steady latest inflation results may seem disappointing at face value but are better than the jump economists were expecting.
The Australian Bureau of Statistics monthly consumer price index data, a key measure of inflation, lifted by 3.4 per cent in the 12 months to January.
This was the same growth rate as recorded in December and below the 3.6 per cent uptick pencilled in by economists.
Consumer price growth has been cooling from its highs in late-2022 but is still above the Reserve Bank's two-three per cent target range.
Convincing progress on inflation of late has sparked talk of interest rate cuts later this year, although the central bank has kept its options open for more hikes if the situation calls for it.
Commenting on the January inflation data, Moody's Analytics economist Harry Murphy Cruise said the lack of progress over the month was not a worrying result.
"Following December's mammoth improvement, markets expected an uptick in inflation as monthly volatility washed through; the fact inflation held steady is a great result," he wrote in a note.
Progress was logged on underlying measures, which strip away irregular or temporary price changes.
The trimmed mean rose 3.8 per cent in the 12 months to January, down from a four per cent lift in December.
"At 3.8 per cent, trimmed mean inflation is fast approaching the top of the RBA's two-three per cent target band," he said.
The biggest contributors to the January consumer price index increase were housing (4.6 per cent), food and non-alcoholic beverages (4.4 per cent), alcohol and tobacco (6.7 per cent) and insurance and financial services (8.2 per cent).
Working in the other direction was recreation and culture, down 1.7 per cent over the 12 months, led by a sharp fall in holiday travel and accommodation prices.
Only some of the basket of goods and services captured in the quarterly report are included in the monthly indicator and the first print in the quarter is usually skewed towards goods.
For this reason, EY senior economist Paula Gadsby said the data should be read with caution.
"The February consumer price index reading will round out our understanding of first quarter inflation, given it has more of a focus on services, which have shown persistent price pressures," she said.
She said talk of rate cuts could be premature given the risks on the horizon.
"Especially if wages growth – the major driver of inflation – fails to ease, and productivity doesn't pick up to the long-run levels the Reserve Bank is counting on," she said.
The bureau has started releasing data that feeds into national accounts next week, with construction work done up 0.7 per cent in the December quarter.
This was broadly in line with consensus and weaker than a 1.4 per cent gain in the quarter before.
A 5.2 per cent quarterly fall in residential building was recorded, but this was offset by a 2.7 per cent uptick in engineering construction and a five per cent lift in non-residential building work.
