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ABS data shows slowdowns in quarterly and annual inflation, helped by Commonwealth rent assistance and falling meat and seafood prices.
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Quarterly inflation drops to 2-year low
31 January 2024
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Inflation eased to 0.6 per cent last quarter, down from 1.2 per cent in the September quarter and the slowest rise since March 2021, according to ABS data released this morning.
Annual inflation also cooled to 4.1 per cent from 5.4 per cent.
ABS head of prices statistics Michelle Marquardt said the most significant contributors to the December quarter rise were housing (+1.0 per cent), insurance and financial services (+1.7 per cent) and alcohol and tobacco (+2.8 per cent).
Housing prices were driven by utilities (+0.6 per cent), rents (+0.9 per cent) and dwellings purchased by owner occupiers (+1.5 per cent).
“Higher labour and material costs contributed to price rises this quarter for construction of new dwellings. The 1.5 per cent increase is slightly higher than the 1.3 per cent rise in September 2023 quarter,” Ms Marquardt said.
Rental prices also rose 0.9 per cent for the quarter, down from a 2.2 per cent rise in the September quarter.
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She said the rate of quarterly growth was moderated by changes to Commonwealth Rent Assistance. Excluding the changes to rent assistance, rental prices would have increased by 2.2 per cent in the December 2023 quarter.
Tobacco rose 7 per cent, following the introduction of the 5 per cent annual tobacco excise indexation and biannual Average Weekly Ordinary Time Earnings increase, which were both applied on September 1 last year.
The ABS found insurance had a "strong quarterly movement" of 3.8 per cent, following a 2.8 per cent rise in the September quarter.
“The increase in insurance was due to higher premiums across motor vehicle, house and home contents insurance. Over the past 12 months insurance rose 16.2 per cent, making it the largest annual rise since March 2001,” Ms Marquardt said.
Food and non-alcoholic beverages also increased by 0.5 per cent, although the rise was the smallest since September 2021.
The rise was led by consumers having meals out and buying takeaway foods (+0.9 per cent), food products not elsewhere classified (+1.9 per cent), and bread and cereal products (+1.9 per cent).
Partially offsetting the quarterly rise were price falls for meat and seafood (-1.2 per cent), and fruit and vegetables (-1.2 per cent).
"Meat and seafood prices fell this quarter due to increased supply leading to price drops for lamb and goat of 12.1 per cent, and beef and veal of 1.5 per cent,” she said.
Annual inflation rose 4.1 per cent while trimmed mean inflation rose 4.2 per cent, down from 5.1 per cent in the September quarter. This represented the fourth quarter in a row of lower annual trimmed mean inflation, down from the peak of 6.8 per cent in the December 2022 quarter.
Housing (+6.1 per cent), food and non-alcoholic beverages (+4.5 per cent), and alcohol and tobacco (+6.6 per cent) were the biggest contributors to the headline figure.
“While prices continued to rise for most goods and services, annual CPI inflation has fallen from a peak of 7.8 per cent in December 2022, to 4.1 per cent in December 2023,” Ms Marquardt said.
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