CPI rises 0.6 percent in June quarter

CPI rises 0.6 percent in June quarter
CPI rises 0.6 percent in June quarter

Australia's Consumer Price Index has risen 0.6 percent over the June quarter, slightly higher than expectations. 

The biggest drivers in the uptick of prices was fuel, up 10 percent.

International holiday travel and accomodation was up 2.7 percent, medical and hospital services was up 2.6 percent and tobacco was up 2.4 percent.

On the flip side, prices for fruit and vegetables were down 2.8 percent), domestic holiday travel and accommodation was down 1.5 per cent and electricity was down -1.7 per cent over the quarter.

"Inflation remains contained," noted CommSec chief economist Craig James.

"But we can never claim that the inflation dragon is dead, rather resting.

"Higher fuel prices can be passed through in terms of higher taxi and public transport fares as well as freight and courier prices.

"Weather events like the current drought in eastern Australia can push up prices of supermarket goods as well as café, restaurant and takeaway food prices.

"The high activity in infrastructure building can put upward pressure on construction sector wages, in turn lifting prices of newly-built dwellings,' James advised.   

ABS chief economist Bruce Hockman said automotive fuel price rise of 10.2 per cent in the June quarter 2019 contributed to half of the 0.6 per cent rise this quarter.

CPI rises 0.6 percent in June quarter

 

"Automotive fuel prices returned to levels recorded in late 2018 after falling 8.7 per cent in the March quarter 2019."

The CPI rose 1.6 per cent through the year to the June quarter 2019, after increasing 1.3 per cent through the year to the March quarter.

"Annual growth in the CPI continues to be subdued due to falls in a number of administered prices. Through the year, utility prices have fallen 0.2 per cent and child care has fallen 7.9 per cent following the introduction of the Child Care Subsidy package in July 2018."

Westpac had been forecasting a 0.5% rise in the June quarter CPI, taking the annual pace to a 1.5% rise from 1.3%.

"The June quarter tends to be a seasonally soft quarter with the ABS projecting a seasonal factor of 0.2ppt increase," Westpac's Justin Smirk said.

IFM economist Alex Joiner says the figures were a slight upside surprise, however it is inline with expectations on core measures.

ANU professor Ben Phillips says CPI for child care shows that since 2002 prices after subsidies up 69% or 14% (real terms). About -6% relative to incomes.

Darwin saw the biggest increase in inflation, up 0.8 percent, driven by a 14 percent rise in domestic holiday, travel and accomodation prices.

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

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Cpi Consumer Finance

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