The Consumer Price Index (CPI) lifted 0.6 per cent during the December quarter, according to the Australian Bureau of Statistics (ABS), resulting in an annual increase of 4.1 per cent.
The 0.6 per cent increase was much lower than the 1.2 per cent rise in the September 2023 quarter, and represented the smallest quarterly rise since the March 2021 quarter. It also surpassed expectations, with the market agreeing on a likely 0.8 per cent lift.
“While prices continued to rise for most goods and services, annual CPI inflation has fallen from a peak of 7.8 per cent in December 2022, to 4.1 per cent in December 2023,” said Michelle Marquardt, ABS head of prices statistics.
The most significant contributors to the December quarter rise were housing (+1.0 per cent), alcohol and tobacco (+2.8 per cent), insurance and financial services (+1.7 per cent), and food and non-alcoholic beverages (+0.5 per cent).
Housing was driven by new dwellings purchased by owner occupiers (+1.5 per cent), rents (+0.9 per cent) and utilities (+0.6 per cent).
“Higher labour and material costs contributed to price rises this quarter for construction of new dwellings. The 1.5 per cent increase is slightly higher than the 1.3 per cent rise in September 2023 quarter,” Ms Marquardt said.
Insurance also had a strong quarterly movement of 3.8 per cent, following the 2.8 per cent rise in the September 2023 quarter.
“The increase in insurance was due to higher premiums across motor vehicle, house and home contents insurance. Over the past twelve months Insurance rose 16.2 per cent, making it the largest annual rise since March 2001,” Ms Marquardt said.
Food and non-alcoholic beverage prices rose this quarter, although the rise was the smallest since September 2021.
Annually, housing (+6.1 per cent), food and non-alcoholic beverages (+4.5 per cent), and alcohol and tobacco (+6.6 per cent) contributing the most to the CPI rise of 4.1 per cent.
