retail inflation for december quarter double previ

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    Sydney - Tuesday - January 25: (RWE) - The all Groups CPI rose
    0.8 per cent in the December quarter 2004, compared with 0.4 per cent in
    the September quarter of the same year.
    General consensus was 0.6 per cent.
    It was the highest figure since September 2003 but still within
    the target band set by the RBA of 2 to 3 per cent on an annual basis.
    On a year on year basis the figure was 2.6 per cent against
    expectation of 2.4 per cent.
    The jump on an annual basis was mainly attributed automotive
    fuel, house purchases hospital and medical services, rents beer, fruit,
    restaurant meals and tertiary education.
    Contributing most to the overall increase this quarter were
    rises in house purchase (+1.5%), automotive fuel (+2.5%), fruit (+9.2%),
    domestic holiday travel and accommodation (+4.3%), motor vehicles
    (+1.5%), beer (+1.5%), restaurant meals (+1.2%) and rents (+0.5%).
    Partially offsetting these increases were falls in women's
    outerwear (-3.8%), pharmaceuticals (-4.1%), clothing accessories and
    jewellery (-2.3%) and toys, games and hobbies (-3.0%).
    Contributing most to the annual increase were rises in automotive
    fuel (+15.9%), house purchase (+5.2%), hospital and medical services
    (+6.3%), rents (+2.2%), beer (+4.4%), tertiary education (+8.4%), fruit
    (+8.5%), restaurant meals (+3.9%) and tobacco (+3.2%). Partially
    offsetting these increases were falls in motor vehicles (-2.0%), audio,
    visual and computing equipment (-13.1%), vegetables (-5.9%), overseas
    holiday travel and accommodation(-2.9%) and women's outerwear (-3.8%).
    The discussion of the CPI groups below is ordered in terms of
    their significance to the change in All groups index points

    Food price rises
    ----------------

    The 1.4 per cent rise in food prices was mainly due to increases
    in the price of fruit (+9.2%), restaurant meals (+1.2%), beef and veal
    (+3.5%), pork (+11.5%), vegetables (+1.8%) and take away and fast foods
    (+0.6%).
    These increases were partially offset by a fall in the price of
    lamb and mutton (-3.0%).
    The increase in fruit prices can be largely attributed to reduced
    supplies of bananas, apples and citrus fruit.
    Meat prices varied, with beef and veal and pork increasing due to
    tightening of supplies, while lamb and mutton prices fell with increased
    lamb numbers presented at sale yards.
    Over the twelve months to December quarter 2004, food prices rose
    1.7%.
    The main contributors to the increase were fruit (+8.5%),
    restaurant meals (+3.9%), take away and fast foods (+2.0%) and soft
    drinks, waters and juices (+4.5%).
    Partially offsetting these increases were falls in vegetables
    (-5.9%), tea, coffee and food drinks (-3.7%) and bread (-0.7%).

    Transportation up
    -----------------

    Prices for all components of transportation rose this quarter
    with automotive fuel (+2.5%) and motor vehicles (+1.5%) being the main
    contributors.
    Petrol prices rose in August (+5.3%), September (+0.5%) and
    October (+3.3%) and fell in November (-1.4%) and December (-5.3%).
    The price of motor vehicles rose mainly as a result of a
    reduction in bonuses and other incentives offered by dealers. Prices for
    both locally produced and imported vehicles increased.
    Over the twelve months to December quarter 2004, transportation
    prices rose 4.6%.
    Increases in automotive fuel (+15.9%), motor vehicle repair and
    servicing (+3.2%), other motoring charges (+2.8%) and urban transport
    fares (+2.3%) more than offset a fall in motor vehicles (-2.0%).


    Housing advance
    ---------------

    The rise in housing prices was mainly attributable to increases
    in house purchase (+1.5%), rents (+0.5%), electricity (+0.5%) and house
    repairs and maintenance (+0.7%).
    The house purchase index rose in all capital cities, driven to a
    large extent by a general shortage of skilled tradesmen leading to
    increased labour costs and rising material costs, particularly for steel
    and roofing materials. The increases ranged from 0.2% in Canberra to 5.2%
    in Hobart.
    Over the twelve months to December quarter 2004, housing prices
    rose 3.9%.
    All components of housing rose with house purchase (+5.2%), rents
    (+2.2%), property rates and charges (+5.2%), electricity (+2.8%), house
    repairs and maintenance (+2.7%) and gas and other household fuels (+6.4%)
    being the most significant.

    Recreation costs up
    -------------------

    The rise in the recreation index this quarter was mainly due to
    increases in domestic holiday travel and accommodation (+4.3%), audio,
    visual and computing media and services (+1.5%) and sports participation
    (+1.0%).
    Falls in toys, games and hobbies (-3.0%), audio, visual and
    computing equipment (-1.6%) and pets, pet foods and supplies (-1.7%)
    provided some offsetting price decreases.
    The rise in domestic holiday travel and accommodation was due to
    the seasonal increase in holiday accommodation tariffs and domestic air
    fares.
    The fall in toys, games and hobbies reflected pre-Christmas
    discounting on most toys, board games and video games at department and
    specialty toy stores.
    Over the twelve months to December quarter 2004, the recreation
    index fell 0.2%.
    Falls in audio, visual and computing equipment (-13.1%), overseas
    holiday travel and accommodation (-2.9%) and audio, visual and computing
    media and services (-2.1%) more than offset increases in other
    recreational activities (+3.9%), sports participation (+4.7%) and
    domestic holiday travel and accommodation (+1.4%).

    Clothing and footwear down
    --------------------------

    Clothing and footwear prices fell this quarter due mainly to
    decreases in women's outerwear (-3.8%), clothing accessories and
    jewellery (-2.3%) and men's outerwear (-0.4%).
    A small rise in children's footwear (+1.2%) provided a partial
    offsetting increase.
    Clothing and footwear prices have fallen in the December quarter
    of the last two years and reflects, in part, the bringing forward of
    post-Christmas/New Year sales at department and specialty stores to
    earlier in December.
    Over the twelve months to December quarter 2004, clothing and
    footwear prices fell 1.9%, with falls in all categories except women's
    underwear, nightwear and hosiery.

    Alcohol and tobacco dearer
    --------------------------

    Prices for all components of alcohol and tobacco rose this
    quarter.
    Beer rose 1.5%; wine 0.3%; spirits 0.7% and tobacco 0.1%.
    The increase for beer and spirits was mainly due to the end of
    some discounting on packaged beer and increases in bar service prices at
    hotels and clubs.
    Over the twelve months to December quarter 2004, alcohol and
    tobacco prices rose 3.5%. Prices for beer (+4.4%), tobacco (+3.2%), wine
    (+2.6%) and spirits (+3.5%) all rose.

    Household furnishings , supplies and services edge up
    -----------------------------------------------------
    Most categories of household furnishings, supplies and services recorded
    small price increases this quarter with furniture (+0.8%) and household
    cleaning agents (+2.3%) being the most significant. A small decrease in
    small electric household appliances (-2.6%) partially offset this
    increase.
    Over the twelve months to December quarter 2004, household
    furnishings, supplies and services prices fell 0.1%. Falls in furniture
    (-1.1%), small electric household appliances (-3.9%), glassware,
    tableware and household utensils (-3.7%) and towels and linen (-2.8%)
    were partially offset by increases in other household supplies (+1.9%),
    household services (+3.3%), household cleaning agents (+2.0%) and floor
    and window coverings (+1.9%).

    HEALTH costs fall
    -------------------

    The fall in health costs in the December quarter was due to a
    fall in the net cost of pharmaceuticals (-4.1%) as a direct result of the
    cyclical effect of the Pharmaceutical Benefits Scheme safety net,
    partially offset by small increases in dental services (+1.2%) and
    optical services (+0.4%).

    There was no change in the net cost of hospital and medical services in
    the December quarter 2004.
    An increase in general fees for a number medical services was
    offset by an overall increase in bulk billing ratios for medical services
    and the negative impact on out-of-hospital medical expenses of the
    Medicare Plus safety net which was introduced in the March quarter 2004.
    Over the twelve months to December quarter 2004, health costs
    rose 5.0%. Hospital and medical services (+6.3%), dental services (+5.0%)
    and pharmaceuticals (+1.2%) were the main contributors to this increase.

    CPI rises in all capital cities
    -------------------------------
    At the all groups level, the CPI rose in all capital cities in
    the December quarter 2004.
    The increases ranged from 0.2% in Darwin to 1.2% in Hobart.
    The higher result in Hobart was mainly due to that city recording
    increases in housing and recreation that were well above the national
    average.
    The lower result in Darwin was largely due to that city recording
    price increases for alcohol and tobacco, transportation and recreation
    which were well below the national average and the lowest of all eight
    capital cities.
    Over the twelve months to December quarter 2004, the All groups
    CPI rose in each of the eight capital cities. The increases ranged from
    1.9% in Darwin to 3.3% in Hobart.
    ENDS
 
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