The Australian Bureau of Statistics released the Consumer Price Index, Australia data for the June-2013 quarter today. The quarterly inflation rate was 0.4 per cent and this translated into an annual rate of 2.4 per cent, down on 2.5 per cent in the March-quarter 2013. However, if we acknowledge the inflation spike in the September-quarter 2012, and consider the annual trend, the annual inflation rate is more like 1.6 per cent, which puts it well below the lower-bound of the RBA’s inflation targetting range (2 to 3 per cent). The Reserve Bank of Australia’s preferred core inflation measures – the Weighted Median and Trimmed Mean – are now well within the inflation targetting range and are probably trending down. This suggests that the RBA will probably consider the inflation outlook to be benign or “too low” and will instead have to shift their focus to the failing labour market, which in the last month showed signs of considerable deterioration after a flat 18months.The evidence is suggesting that the economy is slowing under the weight of the federal government’s obsessive pursuit of a budget surplus. The benign inflation outlook provides plenty of room for further fiscal stimulus.