Monthly CPI indicator rose 4.9% annually to October 2023

The monthly Consumer Price Index (CPI) indicator rose 4.9 per cent in the 12 months to October 2023, according to the latest data from the Australian Bureau of Statistics (ABS).

Leigh Merrington, acting ABS head of prices statistics, said: “The 4.9 per cent increase is down from 5.6 per cent in September and below the peak of 8.4 per cent in December 2022.”

The most significant contributors to the October annual increase were Housing (+6.1 per cent), Food and non-alcoholic beverages (+5.3 per cent) and Transport (+5.9 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 in October is 5.1 per cent, lower than the annual rise of 5.5 per cent in September,” Mr Merrington said.

The annual increase for Housing of 6.1 per cent was also lower than the 7.2 per cent increase in September. New dwelling prices rose 4.7 per cent, which is the lowest annual rise since August 2021, as building material price increases continued to ease reflecting improved supply conditions.

Rent prices rose 6.6 per cent in the 12 months to October, due to low vacancy rates and a tight rental market.

“The annual increase in Rents is lower than the rise of 7.6 per cent in September largely due to the increase in Commonwealth Rent Assistance that took effect from 20 September 2023 and reduces rents for eligible tenants. Excluding the changes to rent assistance, Rents would have increased 8.3 per cent in the 12 months to October,” Mr Merrington said.

Electricity prices rose 10.1 per cent in the 12 months to October reflecting increases in wholesale prices from annual price reviews in July 2023. Electricity price rises have been partly offset by the introduction of the Energy Bill Relief Fund rebates for eligible households from July.

“Electricity prices have risen 8.4 per cent since June 2023. Excluding the rebates, Electricity prices would have increased 18.8 per cent over this period,” Mr Merrington said.

Automotive fuel prices were 8.6 per cent higher in October compared to 12 months ago, due to higher global oil prices. This is down from the annual increase of 19.7 per cent in September.

“The reinstatement of the full fuel excise tax to 46 cents per litre on 30 September 2022 contributed to the annual increase to September 2023 but not to October 2023. This, combined with a monthly fall of 2.9 per cent, has reduced the annual rise for Automotive fuel,” Mr Merrington said.

Food and non-alcoholic beverages rose 5.3 per cent in the 12 months to October, up from the 4.7 per cent annual increase in September.

“While annual inflation continues to ease across most food categories, Fruit and vegetable prices are higher this month compared to 12 months ago, driven by price rises for melons and bananas,” Mr Merrington said.