CANBERRA: Australia’s September quarter consumer price inflation (CPI) report has just been released, and it’s come in hotter-than-expected. Headline CPI rose by 0.7% for the quarter, leaving the year-on-year increase at 1.3%.
The figure beat expectations for an increase of 0.5% and was higher than the 0.4% level reported in the June quarter. According to the ABS, the most significant price rises over the quarter came from fruit (+19.5%), vegetables (+5.9%), electricity (+5.4%) and tobacco (+2.3%). They were partially offset by falls in communication (-2.3%) and fuel (-2.9%).
The ABS said the jump in fruit and vegetable prices was due to adverse weather conditions, including floods, in major growing areas, impacting supply chains. This table from the ABS breaks down the increase in headline inflation by individual component, looking at both the quarterly and year-on-year changes. The quarterly movement is shown in the left-hand column, with the year-on-year change found on the right:
By source, tradable inflation — primarily influenced by global factors and accounting for 40% of the ABS’ CPI basket — rose by 1% for the quarter. Higher fruit prices, along with increased costs for international travel and accommodation, were factors that contributed to the rise, partially offset by a 2.9% decline in the cost of automotive fuel.
Non-tradable inflation — reflective of domestic cost pressures and accounting for the remaining 60% of the basket — rose by a smaller 0.5%. A 5.4% rise in electricity prices, accompanied by a 4% lift in property rates and charges, were partially mitigated by a 2.5% drop in telecommunication equipment and services. From the same quarter in 2015, tradable inflation rose by 0.7%, overshadowed by an increase of 1.7% in non-tradable prices. Both were above the flat and 1.6% increases seen in the year to June.
Reflective of the divergent economic performance between mining and non-mining states and territories, Sydney, Melbourne, Brisbane and Canberra recorded the fastest increase in inflation over the past 12 months. Unsurprisingly, those capitals more aligned to the mining sector — Perth, Darwin and Adelaide — logged the slowest increase in prices over the same period.
