The Australian Bureau of Statistics (ABS) revealed that the Consumer Price Index (CPI) rose 0.8% in the September quarter, up 3% each year, in line with economists’ expectations.
The quarterly increase is due to higher fuel costs (7.1%) and housing construction (3.3%).
“The disruption and shortage of supplies has increased the cost of building timber and other products. Coupled with high levels of building activity, this has communicated price increases to consumers,” said ABS Price Statistics Officer. increase. Michelle Marquardt said..
“Rising fuel prices also contributed to the rise in the CPI in the September quarter, and CPI’s automotive fuel series reached its highest level in half a century of history.”
The ongoing global supply crisis has also boosted prices for furniture (3.8 percent) and automobiles (1.4 percent).
The most significant price declines were fruit (8.3%) due to lower demand from the food industry and favorable growing conditions where farmers enjoyed record harvest times. Clothing prices also fell (5.5%) after winter inventories accumulated as people stayed home during the blockade.
Westpac’s senior economist, Justin Smark, said the September quarter CPI was backed by the government.
Smark said that when the economy resumes, price adjustments will be seen due to global supply chain disruptions and labor shortages in the region.
“Currently, we expect core inflation to peak at just under 3% in late 2022 and then ease until 2023. Therefore, the September quarter CPI shows signs that thinking needs to be adjusted. looking for.” Smark said..
Economists expected CPI numbers, but it was surprising that the underlying inflation rate rose 2.1% annually, revealing 0.2% higher than expected. This was the strongest annual increase since 2015.
“The surprise of trimmed mean inflation was caused by stronger than expected non-trade inflation, where various services such as insurance and restaurant meals were surprisingly strong,” said Hayden Dimes, an economist at ANZ. Stated.
Truncated mean inflation is a central bank-focused indicator, so these latest figures could put pressure on the Reserve Bank of Australia (RBA) to rethink forward guidance on cash rates, Dimes said. rice field.
“”[But] We believe that the RBA’s inflation outlook for 2023 will continue to depend on wage expectations, “said Dimes. “And we think it’s unlikely that the RBA will change that view of wage growth.”