Monthly CPI indicator annual rise of 5.6% in May 2023
The monthly Consumer Price Index (CPI) indicator rose 5.6 per cent in the 12 months to May 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 5.6 per cent is the smallest increase since April last year. While prices have kept rising for most goods and services, many increases were smaller than we have seen in recent months."
CPI inflation is often impacted by items with volatile price changes like automotive fuel, fruit and vegetables, and holiday travel.
"It can be helpful to exclude items with volatile price changes from the headline CPI indicator to provide a view of underlying inflation,” Ms Marquardt said. “When excluding these volatile items, the decline in inflation is more modest. The annual increase for the monthly CPI indicator was 6.4 per cent in May, slightly lower than the rise of 6.5 per cent recorded in April and down from a peak of 7.3 per cent in December 2022."
*Volatile items are Fruit and vegetables and Automotive fuel
The most significant contributors to the annual increase in the monthly CPI indicator in May were Housing (+8.4 per cent), Food and non-alcoholic beverages (+7.9 per cent), and Furniture, household equipment and services (+6.0 per cent). Partly offsetting the rise was a fall in Automotive fuel (-8.0 per cent).
The Housing group annual increase of 8.4 per cent was lower than the April increase of 8.9 per cent.
“Within the Housing group, New dwelling prices rose 8.3 per cent, which is the lowest annual growth since November 2021, as building material price increases continue to ease,” Ms Marquardt said.
“Rent price increases went up again from an annual rise of 6.1 per cent in April to 6.3 per cent in May as the rental market remains tight.”
Food and non-alcoholic beverages prices rose 7.9 per cent in the 12 months to May. "The main contributor to this increase was Meals out and takeaway food which increased from 7.3 per cent in April to 7.7 per cent in May, as higher costs of ingredients, rents, utilities, and wages were passed on," Ms Marquardt said. Price rises for Food products not elsewhere classified (+11.5 per cent), Bread and cereal products (+12.8 per cent), and Dairy and related products (+15.1 per cent) were also significant contributors to the increase.
Automotive fuel prices are 8.0 per cent lower compared to 12 months ago. They fell 6.7 per cent in the month of May.
"The annual movement for automotive fuel remains volatile, partly reflecting price changes from 12 months ago. Annually automotive fuel prices fell 8.0 per cent in May, compared to a rise of 9.5 per cent in April," Ms Marquardt said.
The annual increase for Holiday travel and accommodation of 7.3 per cent is lower than the April increase of 11.9 per cent.
“This is the lowest increase for Holiday travel and accommodation since October 2022,” Ms Marquardt said.
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