Monthly CPI indicator up 7.4 percent in the year to January

Media Release

The monthly Consumer Price Index (CPI) indicator rose 7.4 per cent in the year to January 2023, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS Head of Prices Statistics, said "This month's annual increase of 7.4 per cent is lower than the 8.4 per cent rise for the year to December 2022. It is, however, the second highest annual increase since the start of the monthly CPI indicator series in September 2018, signifying ongoing high inflation." 

The most significant contributors to the annual increase in the January monthly CPI indicator were Housing (+9.8 per cent), Food and non-alcoholic beverages (+8.2 per cent) and Recreation and culture (+10.2 per cent).

Ms Marquardt said, “The annual increase for the Housing group in January (+9.8 per cent) was lower than December (+10.1 per cent). The key contributors to this change were New dwellings and Rents.  In monthly terms, both New dwelling (+0.5 per cent) and Rents (+0.7 per cent) prices rose.  However, Rents are growing more strongly than they were 12 months ago while the increases in New dwelling prices are moderating compared to a year ago.”  

Prices for Food and non-alcoholic beverages rose 8.2 per cent annually, lower than the 9.5 per cent annual increase in December. Ms Marquardt said “On a monthly basis most Food and non-alcoholic beverages prices rose.  The main exception was Fruit and vegetables which fell in price (-2.3 per cent)."

Prices for the Recreation and cultural group remained elevated, in the year to January. This was primarily due to Holiday travel and accommodation rising 17.8 per cent for the year to January, down from 29.3 per cent for the year to December.

Ms Marquardt noted, "Airfares and holiday accommodation prices tend to be quite variable, and this month is no exception.  On a monthly basis Holiday travel and accommodation prices fell 7.2 per cent in January following a rise of 29.3 per cent in December."

CPI inflation is often impacted by items with volatile price change such as fruit and vegetables, automotive fuel and holiday travel. Ms Marquardt said: "It can be helpful to exclude items with volatile price change from the headline CPI figure to provide a view of underlying inflation. In the case of the monthly CPI indicator, when excluding holiday travel, the annual movement was a rise of 6.7 per cent in January, compared to 7.4 per cent in December."

*Volatile items are Fruit and vegetables and Automotive fuel

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