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Economics update | August 19, 2022
18 Aug 2022
ABS to release new monthly CPI Indicator
The ABS has announced it is moving to monthly reporting of the Consumer Price Index (CPI). On the August 16, the ABS released an Information Paper detailing the new monthly CPI Indicator. It plans to publish the first release of a standalone monthly CPI in October, alongside the regular quarterly CPI release.
This brings Australia’s CPI reporting into line with many other developed countries, including the United States and the United Kingdom that report consumer prices monthly.
The ABS decision to provide more timely inflation data comes at a crucial time. The Australian economy is experiencing a period strong inflationary pressure, with June quarter CPI showing headline inflation rising to 6.1 per cent and the Reserve Bank forecasting inflationary pressure to remain and reach 7¾ per cent by the end of 2022, before reducing to 4 per cent in 2023 and 3 per cent in 2024. The release of more regular, monthly CPI data is vital for policy makers and businesses to support decision-making in a high inflationary environment.
Unemployment rate falls
The ABS release of Labour Force data shows unemployment dropping by 0.1 per cent to 3.4 per cent for July. Facilitating the decline of an already low unemployment rate was a decrease in the participation rate from 66.8 per cent in June to 66.4 per cent. Male participation dropped by a 0.4 per cent and female participation dropped by 0.3 per cent. Female participation rates are a considerable 8.6 per cent below males, showing a capacity to increase female participation to support labour shortages. The decline in workforce participants coincides with winter school holidays and COVID and other illnesses causing worker absences.
The number of employed people fell by 40,900 and the number of unemployed dropped by 20,200. The drop of 0.3 per cent to 13,558,400 employed people marks the first drop in employment since October 2021. Full-time employment registered an 86,900 decrease whilst part-time employment increased by 46,000.
Following a decline in employment and the continued worker absences due to illness, seasonally adjusted hours worked fell 0.8 per cent to 1,840 million hours.
Increased Penalties for Breaches of Competition and Consumer Law
Following the Albanese Labor Government’s election commitment to protect Australian households and ease cost of living, the penalties corporations can receive for engaging in anti-competitive behaviours has risen from $10 to $50 million. Increasing a 30-year-long $10 million penalty ensures penalties are in line with the breaches made. This aims to disincentivise unfair activities, promote market competition, and drive down prices.
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