Updated 31 July 2024
The Consumer Price Index (CPI) rose to 3.8% p.a in the June 2024 quarter, this is the first increase in growth since the easing that commenced in March quarter 2023.
Quarterly consumer price inflation rose by 1.0% in the June quarter 2024, resulting in an annualised inflation rate of 3.8%. This marks the first lift in annual inflation since the December 2022 quarter.
The monthly CPI indicator grew at 3.8% in June 2024 compared to 4.0% in May.
Previous official forecasts suggested that CPI would reach 3.2% by the end of 2024, then continue to fall over the coming eighteen months.
The current annual figure (3.8%) together with its quarterly and monthly figures suggest inflation is be stickier than expected.
The Producer Price Index (PPI) – a measure of industrial prices – continued reversing the easing trend and grew by 4.8% in the June quarter.
Key contributors to rising prices in the June quarter were clothing and footwear (+3.1 %), health
(+1.5 %), alcohol and tobacco (+1.5%), food and non-alcoholic beverages (+1.2 %), insurance and financial services (+1.2%) and housing (+1.1 %). Communication (-0.8%) was the only sector out of 11 industry groups to record a fall.
Annual goods inflation inched up to 3.2% in the June quarter, a 0.1% increase from the March quarter. Prices for most goods increased in June 2024 with significant increases for tobacco, new dwellings, automotive fuel and fruit over the past year. This reflects persistent pressures of global and local supply chains.
Annual inflation for both goods (3.2% p.a.) and services (4.5% p.a.) rose in June quarter 2024. Inflation has been higher for services than goods for the past year.
The Consumer Price Index (CPI) measures changes in the price of a ‘basket’ of goods and services which account for a high proportion of expenditure by metropolitan households. Comprehensive CPI data is published by the Australian Bureau of Statistics quarterly, while a reduced price survey is conducted every month to supplement the quarterly data.
The Quarterly CPI measure is considered the more reliable indicator of inflation, as it measures all consumer prices. The monthly CPI measure is less accurate, but provides more timely insights on price changes that complement the quarterly release.
The Producer Price Index (PPI) measures changes in the price of industrial goods as they are produced. Some products – for example food – are measured in both the CPI and PPI indicators. PPI measures the price obtained by the producer, while CPI measures the price paid by the final consumer.
For more information from the ABS (including advice on using the CPI in contracts) see: https://www.abs.gov.au/statistics/detailed-methodology-information/information-papers/use-price-indexes-contracts
Ai Group Research & Economics Team
Website: Research and Economics Resource Centre
Email: economics@aigroup.com.au
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