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September quarter CPI falls, but notches second monthly rise

Business

The latest ABS data record three consecutive quarterly inflation decreases despite some upward price pressures on fuel and electricity.

By Philip King 10 minute read

Inflation rose in the September quarter by 1.2 per cent to put the annual rate at 5.4 per cent and mark the third consecutive quarterly fall since inflation peaked at 7.8 per cent last December, the latest ABS data shows.

However, the result marked the second monthly rise in annual CPI results after an increase in August.

“This is the second consecutive rise in the annual movement up from 5.2 per cent in August and 4.9 per cent in July,” ABS head of prices statistics Michelle Marquardt said.

“While many industries price increases are slowing, automotive fuel has had large annual increases in the last two months, which has been driving the movement higher.”

The September quarter annual figure fell from 6 per cent in the June quarter even though prices rose more quickly thanks to increases in housing, electricity and automotive fuel.

“The most significant contributors to the rise in the September quarter were automotive fuel, which rose 7.2 per cent after two quarters of price falls. This is the largest quarterly rise in fuel prices since March 2022 and is mainly caused by higher global oil prices,” the ABS said.

“Rents rose 2.2 per cent following a 2.5 per cent rise in the June quarter with rental price growth for flats continuing to outpace price growth for houses. The increase in rents this quarter was moderated by changes to Commonwealth Rent Assistance.

“Prices for new dwellings rose 1.3 per cent this quarter, though they continue to ease from rises seen in 2022 due to subdued new demand and easing material costs.”

“Electricity rose 4.2 per cent reflecting higher wholesale prices being passed on to customers from annual price reviews in July.”

Ms Marquardt said electricity prices were partially offset by the Energy Bill Relief Fund rebates, which were introduced this quarter.

“These rebates reduced electricity bills for all households in Brisbane and Perth, and for concession households in the remaining states and territories. Excluding the rebates, electricity prices would have increased 18.6 per cent in the September quarter,” Ms Marquardt said.

She said that prices continued to rise for most goods and services but they were offset by falls for childcare, vegetables and domestic holiday travel and accommodation.

A 3.7 per cent fall in the price of fruit and vegetables helped to constrain overall food price increases of 0.6 per cent – the softest quarterly rise since September 2021. Meals out and takeaway foods rose quickest at 2.1 per cent.

“Fruit and vegetable prices fell this quarter due to favourable growing conditions. Berries, grapes, and salad vegetables such as tomatoes, broccoli and capsicums drove the fall,” Ms Marquardt said.

The largest fall in the quarter was for childcare, with prices down 13.2 per cent after subsidies changed for more than 1 million families from early July.

“This change reduced out-of-pocket costs for households, more than offsetting childcare fee increases this quarter. Without the changes to the subsidy, child care would have increased 6.7 per cent,” Ms Marquardt said.

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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