Save
CPI improves for December quarter
Pressure on the Reserve Bank of Australia to cut interest rates in February has further diminished following the release of December’s Consumer Price Index (CPI).
CPI improves for December quarter
Pressure on the Reserve Bank of Australia to cut interest rates in February has further diminished following the release of December’s Consumer Price Index (CPI).
With the drought continuing to have an impact on Australians’ back pocket, the CPI rose by 0.7 of a percentage point in the December 2019 quarter, according to the Australian Bureau of Statistics.
The official figures are in line with forecasts, further denting chances of a rate cut in February following stronger growth numbers in December.
The CPI rose by 1.8 per cent through the year to the December 2019 quarter, following a year’s rise of 1.7 per cent to the September 2019 quarter.
The most significant price rises in the December 2019 quarter were for tobacco (+8.4 per cent); domestic holidays, travel and accommodation (+7.3 per cent); automotive fuel (+4.4 per cent); and fruit (+6.8 per cent).
The most significant price falls this quarter were for international holidays, travel and accommodation (-2.9 per cent) and women’s garments (-2.5 per cent).
ABS chief economist Bruce Hockman said: “Drought conditions are impacting prices for a range of food products. Food prices increased [by] 1.3 per cent this quarter, with price rises for beef and veal (+2.9 per cent), pork (+4.7 per cent), milk (+1.7 per cent) and cheese (+2.4 per cent). Both the impact from the drought and lower seasonal supply contributed to price rises for fruit (+6.8 per cent) this quarter.”
However, Mr Hockman noted annual inflation remains subdued partly due to the fall in housing-related expenses.
“Through the year to the December 2019 quarter, price falls were recorded for utilities (-1.0 per cent) and new dwelling purchase by owner-occupiers (-0.1 per cent), while rent price rises remained modest (+0.2 per cent),” Mr Hockman said.
AMP’s senior economist, Diana Mousina, has warned that low inflation could remain an issue throughout 2020.
“The persistence of the low inflation environment is likely to remain an issue in 2020. Stronger economic growth and higher inflation expectations are required to lift inflation,” Ms Mousina said.
“Other well-known forces like technological improvements, globalisation and competition resulting in easy transportation of goods are keeping down the prices for goods.”
nestegg has previously reported that the central bank is set to hold off February’s rate cut following a stronger-than-expected bounce in the labour market.
About the author
About the author
Expenses
How couples can solve financial disputes without separating
The pandemic has put a new set of pressures on relationships, with finances oftentimes a trigger – so how can couples put such arguments to rest? ...Read more
Expenses
Making way for mobile: Tapping becomes too easy
Cards could be going out of favour as Australians move towards more mobile payment methods. The average person now taps their phone 21 times a month for everyday expenses. ...Read more
Expenses
Winter clothes and white goods: JobSeeker rise provides basic standard of living
A social services group has warned against a $300 a fortnight reduction in the coronavirus supplement which could see Australians struggle to afford food and accommodation. ...Read more
Expenses
Gas prices still sky-high despite international affordability
Australians are still paying too much for gas and LNG products, according to the consumer watchdog. ...Read more
Expenses
Self-care spending through the roof
Australians are better prioritising their own wellbeing during the pandemic despite cutting back on expenses across other areas, if the latest spending data is anything to go by. ...Read more
Expenses
9 in 10 families struggle to keep kids in childcare
As the government’s childcare subsidy ends and payments revert to pre-COVID status, nine in 10 Australians have said that it will be a financial burden to send their children to childcare, new rese...Read more
Expenses
Falling gas prices fail to reach consumers
Australians living on the east coast are paying significantly above export parity prices, new research has found. ...Read more
Expenses
‘A marathon not a sprint’ means Aussies are holding back
More cautious spending habits are already translating to long-term conservative attitudes when it comes to money, a new study has found. ...Read more
Expenses
How couples can solve financial disputes without separating
The pandemic has put a new set of pressures on relationships, with finances oftentimes a trigger – so how can couples put such arguments to rest? ...Read more
Expenses
Making way for mobile: Tapping becomes too easy
Cards could be going out of favour as Australians move towards more mobile payment methods. The average person now taps their phone 21 times a month for everyday expenses. ...Read more
Expenses
Winter clothes and white goods: JobSeeker rise provides basic standard of living
A social services group has warned against a $300 a fortnight reduction in the coronavirus supplement which could see Australians struggle to afford food and accommodation. ...Read more
Expenses
Gas prices still sky-high despite international affordability
Australians are still paying too much for gas and LNG products, according to the consumer watchdog. ...Read more
Expenses
Self-care spending through the roof
Australians are better prioritising their own wellbeing during the pandemic despite cutting back on expenses across other areas, if the latest spending data is anything to go by. ...Read more
Expenses
9 in 10 families struggle to keep kids in childcare
As the government’s childcare subsidy ends and payments revert to pre-COVID status, nine in 10 Australians have said that it will be a financial burden to send their children to childcare, new rese...Read more
Expenses
Falling gas prices fail to reach consumers
Australians living on the east coast are paying significantly above export parity prices, new research has found. ...Read more
Expenses
‘A marathon not a sprint’ means Aussies are holding back
More cautious spending habits are already translating to long-term conservative attitudes when it comes to money, a new study has found. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
