The monthly Consumer Price Index (CPI) indicator rose 6.9 per cent in the year to October 2022, according to the latest data from the Australian Bureau of Statistics (ABS). Michelle Marquardt, ABS Head of Prices Statistics, said “This month’s annual movement of 6.9 per cent is lower than the 7.3 per cent movement in September, however CPI inflation remains high.”
In October, the most significant contributors to the annual rise were new dwellings (+20.4 per cent), automotive fuel (+11.8 per cent) and fruit and vegetables (+9.4 per cent).
“High levels of building construction activity and ongoing shortages of labour and materials contributed to the rise in new dwellings” Ms Marquardt said.
The Federal Government’s temporary cut to the fuel excise ended on 29 September 2022. This saw the fuel tax rate of 46 cents per litre reinstated, up from the temporary cut to 22 cents per litre, which had applied from 30 March 2022. Following this, Automotive fuel prices increased 11.8 per cent in the year to October, up from 10.1 per cent in September.
Food and non-alcoholic beverage prices eased from an annual rise of 9.6 per cent in September to 8.9 per cent in October. Improved growing conditions saw increased supply of fruit and vegetables leading to lower prices in October compared to those seen in September. Annually, prices for fruit and vegetables rose by 9.4 per cent in October, down from 17.4 per cent in September.
Holiday travel and accommodation prices moderated from an annual rise of 12.6 per cent in September to 3.7 per cent in October. Airfare prices eased as school holidays came to an end and lower demand for travel to Europe and America during the off-peak tourist season.
Each year, the ABS updates the expenditure weights applied to the CPI basket. Ms Marquardt said, “This is important to ensure the CPI basket remains up to date and representative of current spending by households, particularly when capturing the changes to spending patterns since COVID-19. The update to weights in October saw several changes, the most significant being international travel, which increased from 0.1 per cent of the CPI basket to 1.9 per cent.
“Typically, annual updates to the weights have limited impact on the overall CPI. This year, however, the significant changes in spending patterns over 2021 and 2022 meant that the reweight had a larger impact on the CPI than usual. The annual movement of the monthly CPI indicator in October, using the previous weights, would have been 7.1 per cent compared to 6.9 per cent using the new weights.”