Food prices drop as inflation figures offer families welcome relief

AUSSIES are in the money as hundreds of everyday household items drop to bargain basement prices — with some now at their cheapest levels for a generation.

• Fairfield families face desperate choice of food or bills
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AUSSIES are in the money as hundreds of everyday household items drop to bargain basement prices — with some now at their cheapest levels for a generation.

As many hard-up families feel the sting of rocketing power prices there was some good news yesterday with weaker than expected inflation offering a hip-pocket boost as milk and food goes cheap.

Official figures from the Australian Bureau of Statistics show that Australia’s inflation rate was just 0.6 per cent in the September quarter, below the expected 0.8 per cent. This low growth rate means that the price of hundreds of goods actually fell during the three months to September — in some cases to their lowest since 1980.

CommSec chief economist Craig James said the low inflation numbers are great news for consumers who should expect to see better value at the checkout, freeing up cash for other purchases. “While there has been much bleating about higher electricity prices, there hasn’t been the same focus on falling food prices — recording the biggest annual decline in five years,” he said. “The slump in fruit and vegetable prices has greater relevance with increased food affordability giving people more cash to spend — such as on electricity.”

Milk is now the cheapest it’s been in 12 years.

And there is good news for fashionistas, revheads and the tech savvy. The ABS’ consumer price index shows men’s and women’s clothing are at their cheapest level in 28 years, cars and telecommunications equipment prices are at their lowest level in 30 years, and audio, visual and computer equipment is at it cheapest level since records began 37 years ago.

Meanwhile milk is the cheapest it’s been in 12 years and food prices have recorded their biggest drop in five years.

Capital Economics chief economist Paul Dales says the low prices should last a while.

The most significant fall during the September quarter was vegetable prices, which dropped a whopping 10.9 per cent, petrol fell 2.3 per cent and telecommunications equipment fell 1.5 per cent in value.

The inflation rise of just 0.6 per cent in September follows a 0.2 per cent increase in the June quarter, bringing the annual inflation rate to just 1.8 per cent for the year to September.

But it was not all good news for hardworking Aussies, with power bills a shock to the system. There was an 8.9 per cent increase in electricity prices, a 5.2 per cent surge in gas prices, a 4.1 per cent jump in both tobacco and international holiday travel, and a 0.8 per cent hike in new dwelling purchases for owner occupiers.

Capital Economics Australia and New Zealand chief economist Paul Dales said consumers still have plenty of time to cash in at the checkout. “The unseasonable weakness in clothing, food and communication may endure as subdued demand and intense competition continues to restrain retailers’ pricing power,” he said.