The Consumer Price Index (CPI) rose 1.8 per cent in the June 2022 quarter and 6.1 per cent annually, according to the latest data from the Australian Bureau of Statistics (ABS).
Head of Prices Statistics at the ABS, Michelle Marquardt, said “The quarterly increase of 1.8 per cent was the second highest since the introduction of the Goods and Services Tax (GST), following on from a 2.1 per cent increase last quarter.”
The most significant contributors to the rise in the June quarter CPI were new dwellings (+5.6 per cent) and automotive fuel (+4.2 per cent).
“Shortages of building supplies and labour, high freight costs and ongoing high levels of construction activity continued to contribute to price rises for newly built dwellings. Fewer grant payments made this quarter from the Federal Government’s HomeBuilder program and similar state-based housing construction programs also contributed to the rise,” said Ms Marquardt.
“The CPI’s automotive fuel series reached a record level for the fourth consecutive quarter. Fuel prices rose strongly over May and June, following a fall in April due to the fuel excise cut.”
The price of goods (+2.6 per cent) continued to rise more strongly than that of services (+0.6 per cent). Notable rises were recorded across the food group (+2.0 per cent) and the furnishings, household equipment and services group (+2.5 per cent). Main contributors to the rise in food prices included vegetables (+7.3 per cent), meals out and takeaway foods (+1.4 per cent), and fruit (+3.7 per cent). Supply chain disruptions due to flooding events, labour shortages, and rising freight costs contributed to higher prices. Furniture prices rose (+7.0 per cent) due to increased transport and material costs, and stock shortages.
Services recorded a smaller rise compared with goods. Financial services (+1.2 per cent) and holiday travel and accommodation (+2.3 per cent) rose. Child care (-7.3 per cent) fell as the full effect of additional child care subsidies for families with two or more children under the age of 6, which commenced on 7 March, flowed through into this quarter. Before and after school care vouchers offered by the NSW Government also contributed to the fall in child care costs. Urban transport fares (-4.4 per cent) fell due to free travel periods introduced by the NSW and Tasmanian State Governments within the quarter.
Annually, the CPI rose 6.1 per cent, with new dwellings (+20.3 per cent) and automotive fuel (+32.1 per cent) the most significant contributors.
“Annual price inflation for new dwellings was the strongest recorded since the series commenced in 1999,” said Ms Marquardt.
Underlying inflation measures reduce the impact of irregular or temporary price changes in the CPI. Trimmed mean inflation increased to 1.5 per cent over the quarter and 4.9 per cent over the year. The price of goods (+8.4 per cent) continued to rise more strongly through the year than that of services (+3.3 per cent).
“Annual trimmed mean inflation was the highest since the series commenced in 2003 and annual goods inflation was the highest since 1987, as the impacts of supply disruptions, rising shipping costs and other global and domestic inflationary factors flowed through the economy,” said Ms Marquardt.
July 27, 2022