CPI rose 2.7% in the year to August
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The news: The monthly consumer price index indicator increased 2.7% in the 12 months to August, putting it at its lowest level since the same month in 2021.
The numbers: The headlining figure was largely driven by falls in automotive fuel and energy, due to government rebates. There was upwards pressure from housing, food, alcohol and tobacco.
Electricity prices were down 14.6% on the back of state and federal rebates, compared to a 6.4% decline in July. If these rebates were excluded, electricity prices would have been up 0.1% in August and 0.9% in July.
CPI excluding volatile items was up 3% in August, down from 3.7% the month before. The annual trimmed mean was 3.4%, down from 3.8%.
In the 12 months to July, the monthly CPI indicator rose 3.5% and in the 12 months to June it was up 3.8%.
The context: While the Reserve Bank's 2% to 3% target band for inflation, it reaffirmed on Tuesday that it would all but ignore the impact of temporary state and federal government energy bill relief subsidies in the headline figures and instead consider underlying inflation in the economy. On this measure, it does not expect to see inflation back in the target band for some time.
The monthly figure can be volatile, however this mid-month of the quarter includes more updates to measures of the critical services component than the beginning or end of the period.
What they said: "The falls in electricity and fuel had a significant impact on the annual CPI measure this month," ABS head of prices statistics Michelle Marquardt. said.
"When prices for some items move by large amounts, measures of underlying inflation like the CPI excluding automotive fuel, fruit and vegetables and holiday travel, and the trimmed mean can provide additional insights into how inflation is trending.
"Both measures of annual underlying inflation in August are the lowest they have been for 2.5 years," she said.
The source: Australian Bureau of Statistics media release
