Tag: cpi

CPI Down To 1.7%

According to the ABS, the Consumer Price Index (CPI) rose 0.2% in the December quarter 2014, following a rise of 0.5% in the September quarter 2014. The CPI is trending down at the moment.

CPI-Dec-2014-ALL

The most significant price rises this quarter were for domestic holiday travel and accommodation (+5.8%), tobacco (+4.8%) and new dwelling purchase by owner-occupiers (+1.1%), These rises were partially offset by a fall in automotive fuel (–6.8%). Global oil markets continue to experience oversupply, which resulted in continued falls in oil prices. In Australia, average unleaded petrol prices reached a low of $1.17 per litre in December 2014, the lowest recorded average daily price since February 2009.

The CPI rose 1.7% through the year to the December quarter 2014, following a rise of 2.3% through the year to the September quarter 2014.

The fall in CPI may stimulate calls for the RBA to cut rates, but given that oil price falls already acts as a quasi rate cut, DFA believes a further cut in official rates is not required. The lower dollar and stable unemployment data also suggests there is no need for cuts, indeed, the next movement should be upwards.

Latest CPI Is Down To 2.3%

The ABS published their September CPI data.

The all groups (average across 8 capital cities) rose 0.5% in the September quarter 2014, compared with a rise of 0.5% in the June quarter 2014. On a yearly basis, the CPI rose 2.3% through the year to the September quarter 2014, compared with a rise of 3.0% through the year to the June quarter 2014.

CPI-Sept-2014The most significant price rises this quarter were for fruit (+14.7%), new dwelling purchase by owner-occupiers (+1.1%), property rates and charges (+6.3%) and other services in respect of motor vehicles (+5.8%).

The most significant offsetting price falls this quarter were for electricity (-5.1%) and automotive fuel (-2.5%).

Note though that the Consumer Price Index (CPI) measures price change for consumption goods and services acquired by Australian resident households. The Australian Government repealed carbon pricing with effect from 1 July 2014. It is not possible to quantify the impact of removing the carbon price on the price change measured by the CPI.

This is likely to be a further sign that interest rate rises will be further delayed (there is no pressing inflation problem at the moment).  We discussed this yesterday.

 

CPI 3% Through Year To June 2014 – ABS

The ABS published the Consumer Price Index for the quarter to June 2014 today. The CPI rose 3.0% through the year to the June quarter 2014, following a rise of 2.9% through the year to the March quarter 2014. The Consumer Price Index (CPI) rose 0.5% in the June quarter 2014, following a rise of 0.6% in the March quarter 2014.

The most significant price rises this quarter were for medical and hospital services (+4.6%), new dwelling purchase by owner-occupiers (+1.6%) and tobacco (+3.1%). These rises were partially offset by falls in domestic holiday travel and accommodation (-3.8%), automotive fuel (-2.7%) and telecommunication equipment and services (-1.6%).

CPIJuneThis is at the top end of the RBA target, and highlights the fact they continue to have to balance, inflation, interest rates and other factors. They are still caught in the middle. Inflation is being assisted by the higher dollar exchange rate.