Cost of Living Indexes suggest inflation stable and low

The ABS Cost of Living Indexes for the third quarter show price increases running at a very similar rate to last month. {These were released on Weds this week, but we have been away and only now have a chance to look at them.}

The COL Indexes are designed to answer the question “By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?” They consider this question for a variety of household types (given the different expenditure patterns of households). What we see in the third quarter is annual rates at similar levels to last quarter with the q/q increases coming down after some exceptional moves up last quarter. The Cost of Living remains well below the RBA targeted Core Inflation measure which stood at 2.15% in the third quarter.

q/q y/y
Q2 Q3 Q2 Q3
Pensioner & beneficiary 0.6 0.2 1 1
Employee 0.4 0.2 0.9 0.7
Age Pensioner 0.6 0.1 0.9 0.9
Other Govt Transfer Recipient 0.5 0.2 1.1 1.0
Self-funded retiree 0.4 0.5 1.2 1.2
Headline CPI  0.7 0.5 1.5 1.5


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