Despite edging down on a month‑to‑month basis, the ABS’s monthly CPI indicator was 4.0 per cent in the year to May.
Today’s monthly CPI indicator edged down 0.1 per cent in the month of May, compared to a 0.7 per cent rise in April 2024, but was 4.0 per cent through the year.
Inflation is still higher than we would like, but monthly inflation is less than half its peak and much lower than the 6.1 per cent we inherited from the Coalition.
As we’ve said many times before the monthly CPI number is volatile and can jump around because not every item in the basket is updated each month.
Today’s annual number was dragged higher by fuel prices and the impact of base effects, which are the result of a large fall in month‑to‑month inflation in May 2023 impacting the annual May 2024 number.
The ABS’s numbers that strip out the monthly volatility showed a welcome moderation. Monthly CPI excluding volatile items and holiday travel moderated to 4.0 per cent in May, from 4.1 per cent in April.
We know people are under substantial pressure, but the ABS clearly confirmed again today that inflation would be even higher if it wasn’t for our cost‑of‑living policies.
Electricity prices rose 6.5 per cent in the 12 months to May, but without Energy Bill Relief prices would have increased 14.5 per cent.
Rents rose 7.4 per cent in the 12 months to May but would have risen 9.3 per cent without our boost to Commonwealth Rent Assistance.
We’ve seen around the world that inflation can zig and zag on its way down, it doesn’t always moderate in a straight line and the last mile can be a bit harder.
We saw this with a tick up in inflation in Canada overnight and it also rose in the United States in February and March before heading back down.
We know there’s more to do to fight inflation because it’s still too high and people are doing it tough and that’s why we’re rolling out five different types of responsible cost‑of‑living relief from Monday, at the same time as we turn big Liberal deficits into Labor surpluses.