The Latest Inflation Rate Figures Are in and They Are, Once Again, Bad

inflaction rate australia latest figures cpi abs november 2022
Well, folks, it’s official: the Consumer Price Index (CPI) indicator in Australia rose 7.4% in the year to January, according to the latest inflation rate data from the Australian Bureau of Statistics (ABS). If your wallet just let out a little yelp, you’re not alone.

ABS Head of Prices Statistics, Michelle Marquardt, tried to put a positive spin on things by saying, “This month’s annual increase of 7.4% is lower than the 8.4% rise for the year to December 2022.”

But it’s not hugely comforting when we’re still dealing with the second-highest annual increase since the series began in 2018. We can practically hear your bank account crying.

So, what’s causing interest to remain higher than a Chinese spy balloon? At least, outside of the major geopolitical factors like the war in Ukraine, the fallout from the COVID pandemic and (maybe, maybe not) soaring corporate profits?

According to the data, the main culprits this time around are housing, food, non-alcoholic beverages, recreation, and ‘culture’. Housing costs alone rose by 9.8% annually, with new dwellings and rents being the major contributors.

There was a glimmer of hope here though, as fruit and vegetables did drop by 2.3%. They were the only category in the food and non-alcoholic section which otherwise rose 8.2%. Guess we’ll all be living on salads for the foreseeable.

It’s a similar story in the recreation and culture group, which remain high primarily due to holiday travel and accommodation rising 17.8%. Although, this is less of a jump than the 29.3% we saw in December.

As Marquardt explained: “Airfares and holiday accommodation prices tend to be quite variable, and this month is no exception.”

Treasurer Jim Chalmers, reacting to the stats, said that “2023 will be a story of some substantial economic challenges.”

However, Chalmers said that he believes inflation is “likely to have peaked” and that “the worst when it comes to inflation is behind us.”

“I’m confident that we can get through this… But we don’t pretend away the substantial challenges in our economy repute in today’s national accounts”.

Related: Inflation Is the Highest It’s Been in 32 Years — So What Does It Mean for Interest Rates?

Related: What the Rising Inflation Rate Means for You — and What’s Going to Be Done About It

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