The Consumer Price Index (CPI) rose 4.0% in the 12 months to May 2026, according to the latest data from the Australian Bureau of Statistics (ABS).
Rachael McCririck, ABS head of prices statistics, said: ‘Annual CPI inflation in May was 4.0%, down from 4.2% in the year to April.’
The largest contributor to annual inflation in May was Housing, which rose by 6.5%. This was followed by a 3.3 per cent rise in Food and non-alcoholic beverages and a 3.3 per cent rise in Transport.
When prices for some items change significantly, measures of underlying inflation like the Trimmed mean can give more insights into how inflation is trending. For example, Automotive fuel was excluded from the Trimmed mean in March, April and May 2026.
‘Trimmed mean annual inflation was 3.6 per cent in the 12 months to May 2026, up from 3.4 per cent in the 12 months to April 2026,’ Ms McCririck said.
Annual Housing inflation was 6.5 per cent in the 12 months to May. This reflects rising costs for Electricity (+21.1%), New dwellings (+5.6%) and Rents (+3.6%).
‘Electricity costs are 21.1% higher than 12 months ago as Commonwealth and State government rebates that reduced electricity costs for households are no longer in place,’ Ms McCririck said.
Annual inflation for Food and non-alcoholic beverages was 3.3 per cent, up from 2.8 per cent in April. Food inflation was driven by higher prices for Meals out and takeaway, which rose by 4.0 per cent in the 12 months to May 2026.
‘Price growth for Transport eased from what we saw in April, rising 3.3 per cent in annual terms, down from a 6.6 per cent rise in the 12 months to April 2026.
‘On a monthly basis, Automotive fuel prices fell 11.9 per cent in May, after falling by 7.0 per cent in April.
‘These monthly falls include the impacts of the halving of the fuel excise on 1 April and lower world oil prices in recent weeks,’ Ms McCririck
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