Australian Inflation Exploded In The Last Quarter

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Australian inflation data is out, rising 0.8% for the December quarter 2013, after a rise of 1.2% in September.

The market has been taken by surprise following expectations of a 0.5% rise. The Aussie dollar took off like a rocket on the news, touching US88.5c.

Here’s the full release:

The Consumer Price Index (CPI) rose 0.8% in the December quarter 2013, following a rise of 1.2% in the September quarter 2013.

The most significant price rises this quarter were for domestic holiday travel and accommodation (+6.9%), fruit (+8.1%), vegetables (+7.1%), new dwelling purchase by owner-occupiers (+1.0%), international holiday travel and accommodation (+2.6%) and tobacco (+2.2%). The most significant offsetting price fall this quarter was for automotive fuel (-1.1%).

Domestic holiday travel and accommodation rose primarily due to peak season price rises for both airfares and accommodation.

International holiday travel and accommodation prices rose primarily due to peak season price rises for airfares.

Fruit and vegetable prices rose mainly due to a number of adverse weather events and deteriorating growing conditions in some areas.

Tobacco prices rose primarily due to the effects of the federal excise tax increase from 1 December 2013 and a flow on effect from the indexed rise in the excise in August.

Prices for new dwelling purchase by owner–occupiers rose mainly due to rising building materials and labour costs.

The CPI rose 2.7% through the year to the December quarter 2013, following a rise of 2.2% through the year to the September quarter 2013.

We will have the analysis from our markets correspondent Greg McKenna soon.

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