Inflation drops to lowest level for two years
Inflation fell faster than expected for the 12 months to November, in large part due to retailers slashing prices as part of Black Friday sales.
Photo: AAP
The Australian Bureau of Statistics consumer price index for November came in at an annual rate of 4.3 per cent, down from 4.9 per cent in October.
The result was lower than consensus expectations of a 4.5 per cent rise in prices.
It’s the first time monthly inflation has dropped below 4.9 per cent since January 2022.
ABS head of prices statistics Michelle Marquardt said the most significant contributors to rising prices were housing, food and non-alcoholic beverages, insurance and financial services and alcohol and tobacco.
“The increase in Commonwealth Rent Assistance has reduced out-of-pocket rent costs for eligible tenants since its introduction on 20 September 2023,” she said on Wednesday.
“Excluding these changes to rent assistance, rents would have increased 8.8 per cent over the year to November.”
The inflation data followed a jump in retail trade for November, with Black Friday and Cyber Monday discounts driving sales up 2 per cent after a 0.4 per cent drop the month previous.
The November CPI release also included several indicators of all-important services inflation, such as takeaway food and recreational services.
The Reserve Bank has been concerned by elevated services inflation, as it is mainly influenced by domestic rather than international factors.
RBA Governor Michele Bullock in November pointed to price rises in services like hairdressers and dining out as a sign the inflation problem was now homegrown, rather than imported.
The figures will no doubt play on the Reserve Bank board’s mind ahead of their next cash rate meeting in February, although quarterly CPI data due out on January 31 will showcase a wider range of prices and play a larger role in their decision-making.
Treasurer Jim Chalmers said inflation was moderating but not as fast as the government would like and that a warning from the World Bank that the global economy would experience its slowest growth in 30 years during the first half of the 2020s should serve as a wake-up call on economic complacency.
“Our job in Australia is to make this not a lost decade but a defining decade to modernise our economy and maximise our advantages,” he said.
-AAP
