The Consumer Price Index (CPI) rose 1.0 per cent in the June 2024 quarter and 3.8 per cent annually, new data from the Australian Bureau of Statistics (ABS) revealed.
ABS head of prices statistics Michelle Marquardt said the quarterly lift matches the 1 per cent rise seen in the last quarter to March.
The quarter-on-quarter rise was driven by a 3.1 per cent lift in prices across clothing and footwear.
Annually, fashion prices have lifted by 2.9 per cent in the June quarter, a mid-level lift compared to other industries, with the highest annual lift in alcohol and tobacco at 6.8 per cent and the lowest being a 1.1 per cent fall in household furnishings.
ABS data showed that the main contributors to the quarterly lift in fashion were rises in garments (up 2.7 per cent), footwear (up 4.3 per cent) and accessories and clothing services (up 3.3 per cent), driven by new season stock and items returning from sale price following back to school and new year promotional activity in the March quarter.
The annual lift in fashion prices were led by garments for women, up 4.2 per cent.
Other key contributors to the quarterly rise were housing, up 1.1 per cent, and food and non-alcoholic beverages, up 1.2 per cent. The quarterly growth in housing was driven by rents (up 2.0 per cent) and new dwellings purchased by owner-occupiers (up 1.1 per cent).
“The continuing tight rental market and low vacancy rates caused rental prices to go up 2.0 per cent for the quarter, following a 2.1 per cent rise in the March 2024 quarter,” Marquardt said.
Higher labour and material costs drove the 1.1 per cent rise this quarter for construction of new dwellings. The increase follows a 1.1 per cent rise in the previous quarter.
Meanwhile, Marquardt said the latest annual rise in inflation of 3.8 per cent is up from 3.6 per cent in the March quarter, adding that it is the first increase in annual CPI inflation since the December 2022 quarter.
However, in positive news regarding the RBA rate decision next week, the trimmed mean percentage in annual inflation movements show that inflation has been trending down since December 2022. The trimmed mean provides a view of underlying inflation by reducing the effect of irregular or temporary price changes that can impact the CPI.
The main contributors to the annual increase in inflation were housing (up 5.2 per cent), food and non-alcoholic beverages (up 3.3 per cent), and transport (up 4.6 per cent).
The annual rise in housing was driven by rents (up 7.3 per cent) and new dwellings purchased by owner-occupiers (up 5.1 per cent).
Rental price inflation eased annually, after a 7.8 per cent increase in the year to the March 2024 quarter, but remains elevated reflecting a tight rental market. New dwelling price inflation was steady this quarter.
This continues the trend of price rises for new dwelling construction of around 5.0 per cent annually since the September 2023 quarter.
Electricity prices were 6.0 per cent higher compared to 12 months ago, up from 2.0 per cent in the year to the March 2024 quarter. Out-of-pocket costs for electricity rose with Energy Bill Relief Fund rebates gradually being used up by some households.
“Most eligible households continued to receive the Energy Bill Relief Fund rebate in the June quarter,” Marquardt said. “Excluding the rebates, electricity prices would have increased by 14.6 per cent annually.”
Automotive fuel prices rose 7.7 per cent annually, up from 5.2 per cent in the year to the March quarter, reflecting higher prices for unleaded and premium fuels.
Underlying inflation measures reduce the impact of irregular or temporary price changes in the CPI. Annual trimmed mean inflation was 3.9 per cent, down from 4.0 per cent in the March quarter.
“This is the sixth quarter in a row of lower annual trimmed mean inflation, down from the peak of 6.8 per cent in the December 2022 quarter,” Marquardt said.