The Consumer Price Index rose 1.9% in the December 2022 quarter and 7.8% annually, according to the latest data from the Australian Bureau of Statistics (ABS).
Michelle Marquardt (pictured above), ABS head of prices statistics, said the increase for the quarter was slightly higher than the quarterly movements for the September and June quarters last year (both 1.8%).”
“The annual increase for the CPI is the highest since 1990,” Marquardt said. “Annual inflation for goods such as new dwellings and automotive fuel steadied this quarter, however we saw an uptick in inflation for services such as holidays and restaurant meals.”
Marquardt said the most significant contributors to the Consumer Price Index for December quarter for 2022 were domestic holiday travel and accommodation (+13.3%), electricity (+8.6%) and international holiday travel and accommodation (+7.6%).
“Strong demand, particularly over the Christmas holiday period, contributed to price rises for domestic holiday travel and international airfares. The rises seen for domestic and international travel were notably higher than historical December quarter movements,” she said.
“The main factor influencing the rise in electricity prices was the unwinding of the $400 electricity credit offered by the Western Australian Government to all households last quarter. This was partially offset by the ongoing impact of the Queensland Government’s $175 Cost of Living rebate from September 2022 and the introduction of the Tasmanian Government’s $119 Winter Bill Buster electricity discount for concession households.”
Marquardt said growth in prices for New dwellings (+1.7%) slowed relative to recent quarters (+3.7% in September and +5.6% in June) but remained stronger than historic norms.
“Labour and material costs are driving price growth in this area, with signs of material cost pressures easing,” she said.
“Slowing demand for new dwelling construction was reflected in a lower quarterly rate of inflation for new dwellings this quarter compared with the past five quarters”.
The ABS reported food prices continued rising, driven by meals out and takeaway foods (+2.1%) as dining establishments passed through rising costs for inputs including ingredients and labour. Vegetables (-10.2%) partially offset the rise, as the effects of unfavourable weather earlier in the year eased.
The ABS reported the CPI rose 7.8% annually with new dwellings (+17.8%), domestic holiday travel and accommodation (+19.8%) and automotive fuel (+13.2%) the most significant contributors.
“The annual increase for the CPI is the highest since 1990. Annual inflation for goods such as new dwellings and automotive fuel steadied this quarter, however we saw an uptick in inflation for services such as holidays and restaurant meals,” she said.
The annual price increase for services (+5.5%) was the highest since 2008, while goods (+9.5%) showed little change from last quarter. The annual price increase of discretionary goods and services (+7.1%) moved closer to that of non-discretionary goods and services (+8.4%) compared with recent quarters.
