WEEKLY E-MAIL

6 August 2024

AUSTRALIAN CPI DATA: JUNE 2024

By Karen Maher

The latest figures from the Australian Bureau of Statistics (ABS) show that the Consumer Price Index (CPI) increased by 1.0% in the June 2024 quarter, leading to an annual inflation rate of 3.8%.

This annual increase aligns with analysts’ expectations and represents a slight rise from the annual inflation rate of 3.6% recorded in the March quarter.

The most significant contributors to the increase were:

• Housing: Prices surged by 1.1%, driven by a 2.0% increase in rents and a 1.1% rise in new dwellings purchased by owner-occupiers. The tight rental market and low vacancy rates significantly contributed to this rise, following a 2.1% increase in the March quarter.
• Food and Non-Alcoholic Beverages: This category saw a 1.2% increase, with fruit and vegetable prices spiking by 6.3%, marking the highest quarterly rise since 2016. Unfavourable growing conditions were a major factor.

The annual trimmed mean inflation rate, which provides a clearer view of underlying inflation by excluding irregular or temporary price changes, rose by 0.8% in the quarter, slightly lowering the annual rate from 4% to 3.9%. This marks the sixth consecutive quarter of declining annual trimmed mean inflation, down from a peak of 6.8% in December 2022.

The latest consumer price figures should assuage concerns of a rate hike next week, although economists caution Australia is not out of the woods just yet. Economists largely agree that the Reserve Bank of Australia (RBA) is unlikely to consider a rise to the cash rate in its next meeting on 6 August after the latest price indicator demonstrated that inflation, while sticky, appears to be improving.

Many economists are forecasting rate cuts may still be some time away, with predictions leaning towards 2025.

Karen Maher
Associate

If you have any questions or comments, please email me at karen@gfmwealth.com.au

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