Prices across the fashion landscape are continuing to decelerate across Australia, according to new consumer price index (CPI) data from the Australian Bureau of Statistics (ABS).
It comes as overall monthly inflation continues to slow across various categories.
In the 12 months to October 2024, inflation in clothing and footwear has dropped to just 0.6 per cent - down from 1.8 per cent in the year to September, and a peak of 3.6 per cent in the year to June.
The latest drop is driven by a 1.9 per cent deflation (negative growth) in garments for men, with garments for women at zero per cent movement.
In quarterly terms, CPI in the footwear for men category is up 3.9 per cent, while women’s footwear is down 1.3 per cent.
When it comes to children’s fashion, the kids’ garment category CPI is at zero per cent, while kids’ footwear is at 2.7 per cent.
According to the ABS, the monthly CPI indicator overall rose 2.1 per cent in the 12 months to October 2024, unchanged from the 12 months to September 2024.
Head of prices statistics Michelle Marquardt said annual inflation remains the lowest since July 2021.
The top contributors to the annual movement at the group level were food and non-alcoholic beverages (up 3.3 per cent), Recreation and culture (up 4.3 per cent), and Alcohol and tobacco (up 6.0 per cent).
Annual CPI inflation has fallen from 3.8 per cent in June to 2.1 per cent in October due, in part, to significant price falls in electricity and automotive fuel.
Electricity fell 35.6 per cent in the 12 months to October, which is the largest annual fall in the electricity series ever recorded in the CPI. Automotive fuel prices fell 11.5 per cent over the past 12 months after repeated price falls in recent months.
“The falls in electricity and fuel had a significant impact on the annual CPI measure this month,” Marquardt said. “When prices for some items move by large amounts, measures of underlying inflation like the CPI excluding volatile items and holiday travel, and the Trimmed mean can provide additional insights into how inflation is trending,” Ms Marquardt said.
According to Marquardt, annual trimmed mean inflation was 3.5 per cent, up from 3.2 per cent in the previous month and similar to where it was in August.
“The CPI excluding volatile items and holiday travel was 2.4 per cent in the 12 months to October, down from 2.7 per cent in September.”
The lift in trimmed mean inflation indicates that the Reserve Bank of Australia will not budge on interest rates before the end of the year.
In commentary regarding last month’s cash rate hold, the RBA indicated that its focus is on underlying inflation - as represented by the trimmed mean.
In the year to the September quarter, underlying inflation was 3.5 per cent.
“This was as forecast but is still some way from the 2.5 per cent midpoint of the inflation target,” the RBA noted.
“The forecasts published in today’s Statement on Monetary Policy (SMP) [dated November 5] do not see inflation returning sustainably to the midpoint of the target until 2026.”
Across the other contributors to the overall CPI inflation, housing rose 0.2 per cent in the 12 months to October, down from a 1.6 per cent annual rise to September. The large fall in electricity prices mostly offset higher rents and new dwelling prices.
“The annual rise in rents of 6.7 per cent was partly offset by an increase in Commonwealth Rent Assistance (CRA),” Marquardt said. “The maximum rate available for CRA rose by 10 per cent in September 2024 on top of the usual CPI indexation on 20 March and 20 September.
“Without the CRA changes, rents would have risen by 8.1 per cent in the 12 months to October.”
New dwelling prices, which capture new builds and major renovations, rose 4.2 per cent in the 12 months to October. Growth in new dwelling prices has slowed in the past two months due to lower demand, with dwelling prices rising at the lowest annual rate since August 2021.
Electricity fell 35.6 per cent in the 12 months to October. This was due to the combined impact of Commonwealth Energy Bill Relief Fund rebates and State Government rebates in Queensland and Western Australia.
“Commonwealth government and State government rebates continue to reduce household out-of-pocket expenses for electricity, leading to a 12.3 per cent fall in electricity prices in the month of October. This follows large falls in the previous three months since the introduction of the rebates,” Marquardt said.
Meanwhile, annual inflation for food and non-alcoholic beverages was steady at 3.3 per cent in October.