Are we reaching an inflation peak? New data released from the ABS

Aug 1, 2022 | Financial coaching, Reflection

The cost of living is rising. As the Reserve Bank of Australia (RBA) is trying to dampen inflation, it’s now also coupled with higher interest rates and we are seeing those with a mortgage faced with increasing repayments.

It’s not news that many households are under financial pressure.

The Australian Bureau of Statistics (ABS) released their latest figures for the June quarter tracking the price change of 11 categories of household expenditure.

Inflation for the previous twelve months to the end of June was 6.1%. The most significant price rises were new dwelling purchases by owner-occupiers (+5.6%), automotive fuel (+4.2%) and furniture (+7.0%).

You can see the details in the table below or directly on the ABS’ website here.

Consumer Price Index, Australia The Consumer Price Index (CPI) measures household inflation and includes statistics about price change for categories of household expenditure

The Consumer Price Index (CPI) measures household inflation and includes statistics about price change for categories of household expenditure.

Are we seeing a slow-down in price increases?

In some good news, the increase in cost has slowed for seven of these categories compared to the previous quarter.

These categories are: food and non-alcoholic beverages, alcohol and tobacco housing, health, transport, communication and education.

You can see the comparison in the table below:

Category March Quarter June Quarter Slowed
Food and non-alcoholic beverages 2.8% 2.0% Yes
Alcohol and Tobacco 1.1% 0.8% Yes
Clothing and footwear -0.6% 3.5% No
Housing 2.7% 2.5% Yes
Furnishings, household equipment and services 1.1% 2.5% No
Health 2.3% 0.4% Yes
Transport 4.2% 2.3% Yes
Communication 0.3% 0.1% Yes
Recreation and culture 0.6% 1.4% No
Education 4.5% 0.0% Yes
Insurance and financial services 0.5% 1.1% No

Of course, some price rises are due to floods in NSW/Queensland, supply chain issues from covid-19 restrictions and increased fuel costs partly as a flow on from the Russian invasion of Ukraine. It’s hard to know how long these factors will have an impact.

But maybe we are at, or near, the current inflationary peak and things will ease from here?

Simon,
Financial Advisor and Founder – Core IFA

About the author

Simon Duigan is an Independent Financial Advisor and owner of Core Independent Financial Advice (Core IFA). Core IFA is 100% independent and receives no commissions or benefits from any product providers or financial institutions.. Instead, you can be confident that Core IFA have your best interests at heart.

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