The Australian Bureau of Statistics (ABS) reports a 0.2% rise in the Consumer Price Index (CPI) for the September 2024 quarter, marking the slowest quarterly increase since the June 2020 quarter.
Annual inflation also decelerated, dropping to 2.8% from 3.8% in the previous quarter, the lowest since March 2021.
Michelle Marquardt, ABS Head of Prices Statistics, attributed the modest inflation to significant declines in electricity and automotive fuel prices, which offset rising costs in other sectors. “The September quarter’s 0.2% rise is the lowest since the early COVID-19 lockdown period, which saw prices drop due to free childcare initiatives,” Marquardt explained.
Key Contributors and Offsets
Recreation and culture (+1.3%) and food and non-alcoholic beverages (+0.6%) were the primary contributors to the quarterly inflation, driven by increased demand for international and domestic travel during peak holiday season. Conversely, electricity prices fell by 17.3%, largely due to Commonwealth and state government energy rebates. Without these rebates, electricity costs would have increased 0.7% for the quarter. Automotive fuel also declined, dropping 6.7% as global demand for oil softened.
Trimmed Mean and Underlying Inflation Trends
Trimmed mean inflation, which filters out extreme price changes, registered a 3.5% annual rise, down from 4.0% last quarter. This measure, which excludes the notable drops in electricity and fuel, reveals underlying inflation pressure that is higher than the general CPI inflation rate of 2.8%.
Annual Inflation Declines Across Goods, While Services Hold Steady
The ABS data shows that annual inflation for goods slowed significantly, falling to 1.4% from 3.2% in the prior quarter, affected by lower energy prices. However, services inflation remained relatively steady at 4.6%, with increases in rent, insurance, and childcare costs driving the growth in this category.
Monthly CPI Indicator Shows Further Slowdown
The monthly CPI indicator rose by 2.1% in the 12 months to September, down from 2.7% in August, marking the lowest annual increase since July 2021. Key contributors to the monthly rise included food and non-alcoholic beverages (+3.3%), alcohol and tobacco (+6.3%), and housing (+1.6%).
The figures suggest a cooling inflation environment in Australia, as government subsidies and lower global energy costs help to moderate price pressures.
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