Australian Monthly CPI Rises by 3.4% in January 2024

Highlights:

• Monthly CPI indicator in Australia rose by 3.4% in January 2024.
• Significant contributors to the increase include housing costs, food, and non-alcoholic beverages.
• Conversely, holiday travel and accommodation prices experienced a notable decline, impacting overall inflation trends.

The Australian Bureau of Statistics (ABS) has reported a 3.4% rise in the monthly Consumer Price Index (CPI) indicator for the 12 months leading up to January 2024. Michelle Marquardt, head of prices statistics at ABS, highlights both significant contributors and offsets to this increase.

Housing Costs and Rent Prices:

Housing costs rose by 4.6% during this period, with new dwelling prices increasing by 4.8%. Rent prices surged by 7.4%, reflecting the tight rental market nationwide.

Electricity Prices and Rebates:

Annual electricity prices saw a modest rise of 0.8%, attributed to rebates from the Energy Bill Relief Fund. Without these rebates, electricity prices would have surged by 15.3%.

Food and Non-Alcoholic Beverages:

The cost of food and non-alcoholic beverages increased by 4.4% annually, with notable exceptions in fresh food categories like meat, seafood, and fruits and vegetables.

Holiday Travel and Accommodation:

Holiday travel and accommodation prices plummeted by 7.1% in the 12 months to January, primarily due to declines in both domestic and international travel.

Conclusion:

Despite steady annual inflation at 3.4%, the ABS advises excluding volatile items like automotive fuel, fruit and vegetables, and holiday travel to gauge underlying inflation, which stood at 4.1% in January. The trend of declining annual inflation in such items since December 2022 suggests a nuanced economic landscape.

This report provides insights into the Australian economy's resilience amidst fluctuations in various sectors, urging policymakers and consumers alike to consider the broader economic context in assessing price movements.

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