All households faring worse than CPI suggests: ABS
Make us a preferred source
Make us a preferred source on Google
The news: All households experienced their living costs rising faster than inflation in the June quarter for the first time since December 2010, the Australian Bureau of Statistics says.
The numbers: Living costs increased between 1.2% and 1.4% for different types of households, compared to a 1% rise in CPI over the three months to June.
Big contributors to the rising costs included insurance, financial services, housing, food and drink. CPI strips out mortgage expenses and this measure factors them in, which accounts for some of the change in specific groups.
Employee households continue to experience the brunt of the rising costs, with a 6.2% annual lift. But this was a shift down from 6.5% in the 12 months to March and was below a 9.6% peak in June 2023.
Aged pensioners, self-funded retirees and other government support recipients all saw their costs rise in excess of headline inflation.
The context: The Reserve Bank kept rates on hold this week due to persistently high levels of inflation, but the central bank’s broad reflections on the economy remaining hot prompted sharp questioning in a cost of living-related public hearing in Parliament today. While some households are struggling, such as low income workers, RBA chief economist Sarah Hunter pointed out that others are benefiting from higher rates. There is also a divide in experience based on where people live, with Victoria experiencing tougher conditions than Queensland, West Australia and South Australia, Hunter said.
The RBA has to set its policies based on the aggregate experience but significant pressure for some households will continue to be a source of political tension.
What they said: “This is the first time since December 2010 that increases in living costs for all household types were higher than the increase in the CPI," said ABS head of prices statistics Michelle Marquardt.
"Mortgage interest charges rose 2.6 per cent in the June 2024 quarter driven by the continued rollover of some expired fixed rate mortgages to higher variable rate mortgages."
The source: Australian Bureau of Statistics media release
