The hunt for signs of exuberance in the Australian economy will have to continue as the latest inflation figures released by the Australian Bureau of Statistics on Wednesday showed that demand in the economy remains utterly stagnant.

Whenever I look at the inflation figures I always think the best financial advice anyone can ever get is to quit smoking. That of course is not the main reason why you should do it, but once again in September the biggest contributor to inflation was tobacco.

Over the past year tobacco prices – due to the increases in excise – grew by 15%, well above the price rise of any alcohol:

While the overall rate of inflation in the past year was 1.7%, for non-smokers it was closer to 1.3%.

That, even with the massive rises in tobacco prices, we still are seeing inflation below the 2% floor of the Reserve Bank’s target is a good pointer of just how much the economy is lacking any growth in demand.

While the consumer price index rose 1.7%, up from 1.6% in the June quarter, the average of the Reserve Bank’s two core inflation measures was a record low 1.4%.

People are not spending.

In effect there is less pressure for the Reserve Bank to worry about rising prices now than at any time in its history.

In the past quarter, average core inflation was just 0.36%, down from 0.41% in June, and well below the 0.5% growth needed to get to the annual 2% target:

The CPI did increase by 0.5%, which might have you thinking there is some sense of a return to normal demand, but really, if we look at what has been driving the increase in prices we see little evidence of a strong economy.

Aside from tobacco, the big drivers of prices in September were recreation and culture and clothing:

Now that might, again, seem like a good thing – if the prices of recreational and more discretionary items such as clothing are rising, then surely that means people are opening their wallets, going shopping and doing fun things?

Well, no.

The big increase among recreational and culture items was international travel prices – up 6.1% in the September quarter alone – and the increase in clothing and footwear occurred not due to a big jump in people buying such products but for the same reason for the increase in the price of international holidays – the falling Aussie dollar.

The Australian dollar has fallen 7% in value against the US dollar since the start of the year. That makes travelling overseas and imports (which is basically all our clothing and footwear) more expensive.

The falling dollar is good for our exporters and also helps local companies compete against imports, so the RBA would be very happy that the dollar is now as low as it has been this decade. It probably wouldn’t even mind it falling even further.

The reason for the falling dollar is a combination of factors – our low interest rates (which makes putting your money in Australian bank accounts less profitable and so big investors seek higher returns elsewhere) and because the US dollar has been particularly strong since the middle of 2016.

Usually the value of our currency rises and falls with the prices of our major commodities. But since the end of 2016, while the price of iron ore and coal has risen, the value of our dollar has fallen:

The other main contributors to inflation have come via the drought – with strong rises in the price of meat, cereal and dairy foods:

It all suggests no real sign of any great surge in household spending off the back of the tax cuts.

After the June quarter GDP figures the prime minister and treasurer were suggesting we would need to wait until the September quarter figures to see any improvement.

These figures are not out until the first week of December (coincidentally the final parliamentary sitting week of the year) but so far there is little sense of any good news to come.

• Greg Jericho writes on economics for Guardian Australia