Garment prices in Australia have seen a 0.2 per cent average fall in the December quarter compared to the prior quarter, pulling back overall inflation in the fashion, footwear and accessories category to just a 0.1 per cent lift.
This is according to new consumer price index (CPI) data from the Australian Bureau of Statistics (ABS), which added that the slip in garment prices was due to promotional activity across Summer, Black Friday and Cyber Monday sales.
Footwear and accessories helped keep up inflation in the overall fashion category, with footwear up 1.2 per cent and accessories lifting by 0.9 per cent.
Over the past 12 months, the fashion category rose 1.3 per cent, driven by accessories (up 3.6 per cent) and garments for women (up 1.8 per cent).
This news comes as overall inflation rose 0.2 per cent in December 2024 compared to the prior month, and by 2.4 per cent compared to the same month in 2023.
"December quarter’s rise was the same as the 0.2 per cent increase in the September 2024 quarter,” ABS head of prices statistics Michelle Marquardt said. “These rises were the lowest recorded since the June 2020 quarter when the CPI fell during the COVID-19 outbreak when childcare was free.
“Annually, the December quarter’s rise of 2.4 per cent was down from 2.8 per cent in the September quarter.”
When prices for some items move by large amounts, measures of underlying inflation like the trimmed mean can give more insights into how inflation is trending. This is a key figure watched by the Reserve Bank of Australia in determining changes to interest rates.
Annual trimmed mean inflation was 3.2 per cent in the December quarter, down from 3.6 per cent in the September quarter.
“The trimmed mean excluded price falls in both electricity and automotive fuel this quarter, alongside other large price rises and falls,” Marquardt said. “As a result, trimmed mean annual inflation of 3.2 per cent was higher than CPI inflation of 2.4 per cent.”
The main contributors to the quarterly rise of 0.2 per cent were recreation and culture (up 1.5 per cent) and alcohol and tobacco up 2.4 per cent). These rises were largely offset by falls in housing (down 0.7 per cent) and transport (down 0.7 per cent).
The quarterly growth in recreation and culture was driven by domestic holiday travel and accommodation (up 5.7 per cent), ABS reported. Higher prices for airfares and accommodation coincided with higher travel demand during the school holidays.
The rise in alcohol and tobacco prices was mostly driven by tobacco (up 5.8 per cent) reflecting the 5 per cent annual tobacco excise increase and biannual Average Weekly Ordinary Time Earnings based indexation that applied from September 1, 2024.
“The 2024-25 Commonwealth Energy Bill Relief Fund rebates led to a large fall in electricity prices this quarter,” Marquardt said.
“Electricity prices fell by 9.9 per cent in the December 2024 quarter, following a fall of 17.3 per cent in the September 2024 quarter.
“Without the rebates, electricity prices would have risen 0.2 per cent this quarter.”
New dwelling prices also dropped this quarter (down 0.2 per cent), which was the first quarterly fall since the June 2021 quarter. Price growth for new dwellings has slowed in recent months, as project home builders offered incentives and promotional offers to attract new buyers due to weak demand.
Automotive fuel prices fell 2.0 per cent this quarter, following a 6.7 per cent drop in the September 2024 quarter, reflecting lower global oil prices.
As for the annual change in CPI of 2.4 per cent, down from 2.8 per cent in the previous quarter, ABS noted that the main contributors were large falls in electricity (down 25.2 per cent) and automotive fuel (down 7.9 per cent) with easing inflation for new dwelling prices (up 2.9 per cent).
Annual goods inflation was 0.8 per cent, down from 1.4 per cent in the previous quarter. The drop in annual goods inflation was primarily due to large falls in electricity and automotive fuel prices and lower price rises for new dwellings, ABS reported.
Annual services inflation was 4.3 per cent in the December quarter, down from 4.6 per cent in the September quarter. Higher prices for rents, medical and hospital services as well as insurance were the main contributors.
Annual inflation for non-discretionary items fell to 1.8 per cent while annual inflation for discretionary items rose to 3.2 per cent.
Marquardt said that non-discretionary inflation was lower than discretionary inflation for the first time in nearly four years.
"The drop in non-discretionary inflation was from lower prices for automotive fuel and electricity over the past 12 months, as well as lower inflation for food and non-alcoholic beverages and new dwellings,” Marquardt said. “This contributed to the lowest non-discretionary annual inflation since the March 2021 quarter.”