Australia's CPI Up 2.7% Year to August 2024

The monthly Consumer Price Index (CPI) indicator rose 2.7 per cent in the 12 months to August 2024, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: "Annual inflation was 2.7 per cent in August, down from 3.5 per cent in July, and is the lowest reading since August 2021."

At the Group level, the top contributors to the annual movement were Housing (+2.6 per cent), Food and non-alcoholic beverages (+3.4 per cent), and Alcohol and tobacco (+6.6 per cent). Partly offsetting the annual increase was Transport (-1.1 per cent).

Falls in Automotive fuel and Electricity were significant moderators of annual inflation in August. Automotive fuel was 7.6 per cent lower than August 2023 after price falls in recent months. For Electricity, the combined impact of Commonwealth Energy Bill Relief Fund rebates and State Government rebates in Queensland, Western Australia and Tasmania, drove the largest annual fall in electricity prices on record of 17.9 per cent.

"The falls in electricity and fuel had a significant impact on the annual CPI measure this month. When prices for some items move by large amounts, measures of underlying inflation like the CPI excluding Automotive fuel, Fruit and vegetables and Holiday travel, and the Trimmed mean can provide additional insights into how inflation is trending," Ms Marquardt said.

CPI inflation excluding volatile items and holiday travel was 3.0 per cent in August, down from 3.7 per cent in July. Annual Trimmed mean inflation, which excluded both the falls in Automotive fuel and Electricity, alongside other large price rises and falls, was 3.4 per cent in August, down from 3.8 per cent in July.

"Both measures of annual underlying inflation in August are the lowest they have been for 2.5 years," Ms Marquardt said.

*Volatile items are Fruit and vegetables and Automotive fuel.

The Housing group rose 2.6 per cent in the 12 months to August 2024, down from 4.0 per cent in July 2024. In this group, falls in electricity prices partly offset increases in rents and new dwelling prices.

Rents were up 6.8 per cent in the year to August, reflecting continued tight rental markets in most capital cities.

New dwelling prices, which capture new builds and major renovations, rose 5.1 per cent in the 12 months to August and have remained around 5 per cent since August 2023, with builders passing on higher costs for labour and materials.

Electricity fell 17.9 per cent in the 12 months to August, which is the largest annual fall since the electricity series started in the early 1980s.

"Commonwealth Government and State Government rebates led to a 14.6 per cent fall in electricity prices in the month of August, which followed a 6.4 per cent fall in July. Excluding the rebates, electricity prices would have risen 0.1 per cent in August and 0.9 per cent in July," Ms Marquardt said.

Automotive fuel prices were 7.6 per cent lower compared to August 2023, down from an annual rise of 4.0 per cent in July. The average monthly price of unleaded petrol in August 2023 was $2.00 per litre, while in August 2024 the average monthly price dropped to $1.85 per litre.

Annual inflation for Food and non-alcoholic beverages was 3.4 per cent in August, down from 3.8 per cent in July. The largest contributor to the annual rise in food prices were Fruit and vegetables, which rose 9.6 per cent in the 12 months to August, compared to 7.5 per cent to July.

Higher prices for strawberries, grapes, broccoli and cucumbers, drove Fruit and vegetable prices to their largest annual rise since December 2022.