CPI print does inflation no favours
The Consumer Price Index - the main measure of inflation in Australia - rose by 0.6 per cent in the September compared to a second-quarter rise of 0.2 per cent in the June quarter, the ABS said in a media release. The annual rate of inflation fell from 1.9 per cent to 1.8 per cent.In seasonally adjusted terms, the housing group rose 0.9 per cent this quarter. The main contributors to the rise in the housing group over the quarter were electricity (up 8.9 per cent), new dwelling purchase by owner-occupiers (a rise of 0.8 per cent), gas and other household fuels (up 5.2 per cent) and property rates and charges (gain of 2.6 per cent). Over the last twelve months, the housing group rose 3.3 per cent. Again, the main contributors to the rise were new dwelling purchase by owner-occupiers (up by 3.1 per cent) and electricity (a gain of 11.5 per cent).The rise in electricity is due to higher wholesale prices. The rise in new dwelling purchase by owner-occupiers is driven by increases in input prices being flowed through following a pick-up in demand."The latest inflation data doesn't support a change in interest rates - either up or down. Inflation remains below the Reserve Bank's target band of two to three per cent. And underlying inflation looks well placed to meet the Reserve Bank's forecast for 2018 of between 1.5 and two per cent," concluded Craig James, chief economist at CommSec.James also wrote that "both men's and women's clothing are at their cheapest levels in 28 years; car prices are at the lowest levels in 30 years; telecom equipment is the cheapest in 30 years; audio, visual and computing equipment is the cheapest on record (37 years); milk is the cheapest in 12 years. Food prices have recorded the biggest drop in five years."