Australian CPI Rises to 2.3% in November Amid Mixed Trends

Highlights:

• CPI Increases: Australia's Consumer Price Index (CPI) rose by 2.3% in the 12 months to November 2024, driven by higher costs in food, recreation, and alcohol but offset by significant drops in electricity (-21.5%) and automotive fuel (-10.2%).
• Electricity Rebate Impact: Timing of government electricity rebates caused a 22.4% monthly increase in November but kept annual electricity prices 21.5% lower. Without rebates, electricity prices would have fallen by 1.7% annually.
• Housing and Rentals: Housing costs increased by 1.2% annually, while rent prices rose 6.6% amid tight rental markets, with new dwelling inflation slowing to its lowest level since July 2021 at 2.8%.

The monthly Consumer Price Index (CPI) in Australia increased by 2.3% in the 12 months to November 2024, up from 2.1% in October, according to the Australian Bureau of Statistics (ABS). At the time of writing, major contributors to this rise included food and non-alcoholic beverages (+2.9%), alcohol and tobacco (+6.7%), and recreation and culture (+3.2%). However, declines in electricity prices (-21.5%) and automotive fuel (-10.2%) offset these increases.

Electricity Prices Impacted by Rebate Timing

The significant annual drop in electricity prices is attributed to the timing of government rebates. Michelle Marquardt, ABS Head of Prices Statistics, explained that in some regions, households received two rebate payments in October but only one in November. Consequently, electricity prices saw a monthly increase of 22.4% in November but remained 21.5% lower annually.

Excluding government rebates, electricity prices would have fallen 1.7% in the 12 months to November.

Underlying Inflation Trends

Annual trimmed mean inflation, which excludes volatile items, decreased to 3.2% in November from 3.5% in October. The CPI excluding volatile items and holiday travel rose by 2.8% in the same period, primarily due to changes in electricity pricing.

Housing and Rental Market

The housing group recorded a 1.2% annual rise to November, up from 0.2% in October, largely influenced by electricity rebate timing. Rent prices remained high, rising by 6.6% annually, reflecting tight rental markets.

Other Key Movements

• Automotive Fuel: Prices fell 10.2% annually, though a slight monthly increase of 0.9% was recorded in November, marking the first rise since June 2024.
• Food and Non-Alcoholic Beverages: Prices rose 2.9%, with fruit and vegetable prices increasing 6.0% annually, driven by favourable growing conditions.
• New Dwellings: Inflation slowed to 2.8%, the lowest since July 2021, as builders offered discounts and promotions.

The November data underscores varied inflationary pressures, driven by policy interventions and market dynamics.

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