Aussie inflation soars to 7.3%, worse than expected

Australia’s Q3 consumer price index (CPI) is out, with headline inflation rising 1.8% over the quarter to be up 7.3% year-on-year:

The result beat analysts’ expectations of a 1.6% quarterly rise.

The increase in inflation was driven by “New dwelling purchases by owner-occupiers (+3.7%), Gas and other household fuels (+10.9%) and Furniture (+6.6%)”. Thus, the gas cartel is beginning to wreak havoc.

Trimmed mean (underlying) inflation climbed to 6.1% year-on-year, with annual CPI now at its highest level since 1990:

The annual CPI movement of 7.3 per cent is the highest since 1990. The past four quarters have seen strong quarterly rises off the back of higher prices for new dwelling construction, automotive fuel and food. Trimmed mean annual inflation, which excludes large price rises and falls, increased to 6.1 per cent, the highest since the ABS first published the series in 2003.

Nearly all capital cities are experienced rising inflation. Perth is the major exception, presumably due to its cheap gas and electricity prices owing to its domestic gas reservation policy:

Reflecting that most inflation is either imported or weather-related, goods accounted for a little over three quarters of the 7.3% rise in the CPI over the past year:

Meanwhile, essentials continue to drive the lift in inflation:

Based on this data, the RBA is certain to lift rates again on Melbourne Cup Day. I am picking a 0.25% hike.