Australian CPI inflation rose slightly in November 2024, highlighting the ongoing challenges of managing household expenses and maintaining price stability. The Australian Bureau of Statistics (ABS) reported that the monthly Consumer Price Index (CPI) indicator increased by 2.3% over the 12 months to November, compared with 2.1% in October. These figures were published on 8 January 2025. The data provides a useful snapshot of inflation trends at that time, rather than a picture of current inflation. Source: ABS.
CPI Shows Signs of Moderating Inside RBA’s Target Range
Slightly higher than October’s 2.1%, the Australian Consumer Price Index (CPI) noted in November 2024 a 2.3% annual increase. Despite this rise, inflation is within the 2-3% target range of the Reserve Bank of Australia (RBA)
The growth in food, drinks, and leisure influenced the performance of this index mostly using price movement.
Effect of Important Price Movement Case-by-case
Rising contributors were food and non-alcoholic drinks (2.9%); alcohol and tobacco (6.7%); recreation and culture (3.2%). Reductions are somewhat offset by cuts in car fuel (-10.2%) and power costs (-21.5%).
Consumer Spending Patterns Affecting CPI Increase
Higher food and beverage costs as well as rising rates in the categories of recreation and cultural expenditure helped to explain the small rise in November’s Consumer Price Index (CPI). Still, inflation usually stayed within the Reserve Bank of Australia’s goal ranges, implying some economic stability. Given the recent decrease in trimmed mean Australian CPI inflation, analysts think the RBA will probably turn to this as the route it may follow given prospective rate cuts in the not-too-distant future.
Trimmed mean inflation shows a positive trend.
In November, trimmed mean inflation, which excludes volatile goods like food and gasoline, decreased further. The reduction from 3.5% to 3.2% suggests that basic inflationary pressures are gradually easing.
The need for discounts on electricity
Available data show that October and November saw a notable change in the mechanisms of the power subsidies. The effect changed depending on the different dates of allocation, as it caused certain houses to have a temporary drop in the power bill. The whole catalogue also shows a notable general drop in inflation.
Experts Weigh In: A Balanced Outlook
APAC economist at State Street Global Advisors, as core Australian CPI inflation approaches the RBA’s goal. However, experts like Callam Pickering from Indeed stressed that much more has to be done by the services industry before rates can be reduced.
Progressive Change
Some analysts refer to Bendigo Bank’s David Robertson, who would fervently propose that inflation statistics must calm down more before any final rate reductions are taken. Based on improvements in this data, good evidence points to economists projecting a possible rate reduction in May 2025 depending on better labour market statistics and a reduction of service inflation as further expected.
Now the emphasis should be on guaranteeing long-term gains after RVA restores inflation to goal limits. For instance, even if most recent statistics are positive, the RVA would not move strongly on interest rates until signals from the longer run become apparent.
Looking to Stay Ahead of Inflation Trends?
With Australian CPI inflation gradually returning to target, OM Financials is here to help you make educated judgments about the economy and financial strategy.
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Frequently Asked Questions
1. What was Australian CPI inflation in November 2024?
The ABS monthly Australian CPI indicator rose by 2.3% in the 12 months to November 2024, up from 2.1% in October 2024.
2. What was the trimmed mean inflation rate in November 2024?
Annual trimmed mean inflation was 3.2% in November 2024, down from 3.5% in October.
3. Does lower inflation automatically mean mortgage rates will fall?
No. The RBA considers a range of economic indicators before changing the cash rate. Individual lenders also determine their own home loan rates and when changes apply.
Disclaimer: This article provides general information only and is not financial, credit, tax or investment advice. The figures discussed relate to November 2024 and should not be treated as current Australian CPI inflation data. Consider your circumstances and seek appropriately qualified advice before making financial decisions.