Australian inflation surges to 7.3 per cent

Annual consumer price index inflation has reached its highest in more than three decades. Photo / AP

Annual consumer price index inflation has reached its highest in more than three decades, driven by goods, according to the latest data from the Australia Bureau of Statistics.

Goods accounted for more than three quarters of the 7.3 per cent rise in the CPI over the past year, reflecting high freight costs, supply constraints and prolonged elevated demand.

CPI rose 1.8 per cent in the September 2022 quarter, driven by new housing and gas prices.

"This quarter's increase matches that of last quarter and is lower than the 2.1 per cent result in March quarter this year," ABS program manager of prices Michelle Marquardt said.

"All three results exceed any other quarterly results since the introduction of the goods and services tax, and underlie the highest annual increase in the CPI since 1990."

Major contributors to the rise in the September quarter were new dwellings (+3.7 per cent), gas (+10.9 per cent) and furniture (+6.6 per cent).

"Labour shortages in the house construction industry, leading to rises in labour costs, contributed to the rise in new dwellings this quarter," Marquardt said.

"The continuation of material shortages added further price pressure."

But she noted the rate of price growth in new dwellings eased relative to recent quarters (+5.6 per cent and +5.7 per cent in June and March quarters).

She said that reflected a softening in new demand and some easing in supply constraints.

Meanwhile, annual gas price reviews saw higher wholesale prices passed on to consumers.

Electricity rose 3.2 per cent, with rises across the country offset by the WA government's A$400 electricity credit, and smaller credits offered by the Queensland and ACT governments.

"Excluding the effect of these schemes, electricity would have risen 15.6 per cent in the quarter," Marquardt said.

Food (+3.2 per cent) prices continued to climb via meals out and takeaway food (+2.9 per cent) due to higher ingredient, wage and transport costs.

Fruit (+6.6 per cent) and vegetables (+2.9 per cent) were also up, linked to high input costs and weather damage.

Automotive fuel (-4.3 per cent) fell in all three months of the quarter, reflecting falling crude oil prices.

For the second consecutive quarter, annual price inflation for new dwellings was the strongest recorded since 1999 due to high material and labour costs, as well as high demand.

"Fewer grant payments from the federal government's HomeBuilder and similar state-based housing construction programs compared to the same time last year also contributed to the annual increase," Marquardt said.

"Excluding the impact of the reduction in grant payments made, new dwellings would have recorded an annual rise of 17.7 per cent."