The monthly consumer price index (CPI) indicator rose 2.3 per cent in the 12 months to November 2024, up from a 2.1 per cent rise in October, according to the latest data from the Australian Bureau of Statistics (ABS).
The most significant contributors to the annual rise were food and non-alcoholic beverages (up 2.9 per cent), alcohol and tobacco (up 6.7 per cent), and recreation and culture, which rose 3.2 per cent.
Meanwhile, annual trimmed mean inflation – which remains higher than CPI inflation as it removed large price falls for electricity and automotive fuel – was 3.2 per cent in November, down from 3.5 per cent in October.
The ABS noted that annual falls for electricity – down 21.5 per cent – and automotive fuel (-10.2 per cent) partly offset the rise in the CPI.
Michelle Marquardt, ABS head of prices statistics, said: “Annual CPI inflation has risen since last month, in part due to the timing of electricity rebates.”
Marquardt explained that, in some states and territories, households received two rebate payments in October in lieu of not receiving a payment in July.
“From November most households received one payment. As a result, electricity prices fell 21.5 per cent in the 12 months to November, compared to a fall of 35.6 per cent to October,” she said.
Moreover, the CPI, excluding volatile items and holiday travel, rose 2.8 per cent in the 12 months to November, compared with a 2.4 per cent rise in the 12 months to October, primarily driven by changes in electricity prices.
According to the ABS, the housing group rose 1.2 per cent in the 12 months to November, up from a 0.2 per cent annual rise to October, with most of this movement being attributed to the timing of payments of electricity rebates.
“Electricity rebates lower the price of electricity for households. The impact of the rebates was lower in November than October due to the timing of payments,” Marquardt said.
“Most quarterly electricity bills received in November included only one instalment of the Commonwealth Energy Bill Relief Fund, whereas many bills received in October included two instalments.”
Excluding all Commonwealth and state government rebates, electricity would have fallen 1.7 per cent in the year to November.
Moreover, rents rose 6.6 per cent in the 12 months to November, following a similar annual rise of 6.7 per cent to October. This, the ABS highlighted, reflects the continued tight rental markets across the country.
Ahead of the ABS announcement, CBA’s senior economist, Stephen Wu, revealed that the bank anticipated annual headline inflation would rise to 2.6 per cent in November and forecast that the annual trimmed mean measure of core inflation would tick down to 3.4 per cent.
“This configuration of a solid lift in headline CPI but a slightly lower core inflation figure predominantly reflects the inflationary impact of the gradual unwind of the electricity rebates. This unwind will occur through to July 2025, as currently legislated,” Wu said last month.
The economist acknowledged that markets may “knee-jerk react” to a higher headline print but emphasised that the “underbelly” of the inflation data is what the RBA will be focused on.
“In particular, prices for key market services are measured in the middle month of the quarter; updates for these prices will drive the RBA’s assessment of domestically generated inflation.”
NAB economists, meanwhile, had pencilled a 2.4 per cent rise in the headline figure, and similarly to CBA, forecast for trimmed mean inflation to come down to 3.4 per cent.
More to come.
