Australia's July CPI Up 3.5% Yearly

The monthly Consumer Price Index (CPI) indicator rose 3.5 per cent in the 12 months to July 2024, down from 3.8 per cent in June, according to the latest data from the Australian Bureau of Statistics (ABS).

The most significant contributors to the annual rise were Housing (+4.0 per cent), Food and non-alcoholic beverages (+3.8 per cent), Alcohol and tobacco (+7.2 per cent), and Transport (+3.4 per cent).

Leigh Merrington, ABS acting head of prices statistics, said: "CPI inflation is often impacted by items with volatile price changes like in Automotive fuel, Fruit and vegetables, and Holiday travel. It can be helpful to exclude these items from the headline CPI to see underlying inflation, which was 3.7 per cent in July, down from 4.0 per cent in June."

*Volatile items are Fruit and vegetables and Automotive fuel

Housing rose 4.0 per cent in the 12 months to July, down from 5.5 per cent in June. Rents increased 6.9 per cent for the year to July, down from a rise of 7.1 per cent in the 12 months to June, reflecting continued tightness in the rental market in capital cities. The annual rise in new dwelling prices has remained around 5.0 per cent since August 2023, with builders passing on higher costs for labour and materials.

The lower increase in Housing for the year to July was primarily due to falls in prices for electricity. Electricity prices fell 5.1 per cent in the 12 months to July, down from a rise of 7.5 per cent in June. The introduction of new Commonwealth and State rebates drove the fall in July.

"The first instalments of the 2024-25 Commonwealth Energy Bill Relief Fund rebates began in Queensland and Western Australia from July 2024 with other States and Territories to follow from August. In addition, State-specific rebates were introduced in Western Australia, Queensland and Tasmania. Altogether these rebates led to a 6.4 per cent fall in the month of July. Excluding the rebates, Electricity prices would have risen 0.9 per cent in July," Mr Merrington said.

Annual inflation for Food and non-alcoholic beverages was 3.8 per cent in July, up from 3.3 per cent in June. The largest contributor to the annual rise in food prices was Fruit and vegetables, which rose 7.5 per cent in the 12 months to July, compared to 3.6 per cent to June. Higher prices for strawberries, grapes, broccoli and cucumber drove Fruit and vegetable prices to their largest annual rise since December 2022.