Monthly CPI indicator rose 3.4 per cent in the year to February 2024

The monthly Consumer Price Index (CPI) indicator rose 3.4 per cent in the 12 months to February 2024, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: “Annual inflation was unchanged in February and has been 3.4 per cent for three consecutive months”.

The most significant contributors to the February annual increase were Housing (+4.6 per cent), Food and non-alcoholic beverages (+3.6 per cent), Alcohol and tobacco (+6.1 per cent) and Insurance and financial services (+8.4 per cent).

“CPI inflation is often impacted by items with volatile price changes like Automotive fuel, Fruit and vegetables, and Holiday travel. It can be helpful to exclude these items from the headline CPI to provide a view of underlying inflation.

“When excluding these volatile items from the monthly CPI indicator, the annual rise to February was 3.9 per cent, down from 4.1 per cent to January. Annual inflation excluding volatile items has continued to slow over the last 14 months from a high of 7.2 per cent in December 2022,” Ms Marquardt said.

*Volatile items are Fruit and vegetables and Automotive fuel

Housing rose 4.6 per cent in the 12 months to February, unchanged from January. Within Housing, Rents increased by 7.6% for the year, up from 7.4% in January, reflecting a tight rental market and low vacancy rates across the country. New dwelling prices rose 4.9 per cent over the year with builders passing through higher costs for labour and materials. Annual new dwelling price increases have been around the 5 per cent mark for the past six months.

Increases in the prices of Food and non-alcoholic beverages slowed this month. The rise of 3.6 per cent in the 12 months to February was down from the 4.4 per cent annual increase to January. The rise this month is the lowest annual growth since January 2022 with prices in most food categories moderating and, in some cases, such as Meat and seafood and Fruit and vegetables, falling.

Insurance and financial services rose 8.4% in the 12 months to February. This was driven by Insurance, up 16.5 per cent over the past 12 months with rises in premiums across all insurance types (motor vehicle, house and house contents) due to higher reinsurance, natural disaster and claim costs.

Holiday travel and accommodation prices fell 1.3 per cent in the 12 months to February, following a 7.1 per cent annual fall to January. This was driven by falls in domestic holiday travel and accommodation.

“Although Taylor Swift performances saw hotel prices rise in Sydney and Melbourne, elsewhere accommodation and airfare prices fell in February due to the end of the peak travel during the January school holiday period.” Ms Marquardt said.