- ended % % - 2 - 2 source : abs within the aggregate result, we now have the first sign that the slower rate of goods price inflation in global markets is being transmitted to australia. in january, clothing prices declined and the prices of household furnishings fell for the first time in quite a while ( graph 8 ). this is just one monthly figure, of course, so we will be looking for further evidence of a deceleration in goods price inflation over the months ahead. in contrast, the prices of many services are continuing to rise briskly. over the summer, strong demand for travel, accommodation and entertainment contributed to large price increases in these sectors. rents are also rising rapidly, with rental vacancy rates at very low levels in many parts of the country. graph 8 monthly cpi – select items september 2017 = 100, non - seasonally adjusted index index furnishings, household equipment & services * clothing & footwear * two - thirds of this inflation category by weight are goods ; none of the services items in this category are measured in the first month of the quarter. sources : abs ; rba overall, we expect that inflation will trend lower this year and next, but there is still uncertainty about the exact path. inflation is still too high and it will be some time yet before we are back within the 2 – 3 per cent target range. as part of the board ’ s assessment of the future path of inflation, it is paying close attention to trends in household spending, with the recent data showing a clear moderation. in the december quarter, household consumption increased by just 0. 3 per cent, which, in per capita terms, represents a small decline ( graph 9 ). the bounce - back in spending following the pandemic has now largely run its course. more fundamentally, the combination of cost - of - living pressures, higher interest rates and the decline in housing values is weighing on consumption. the household saving rate has declined from the very high rates of recent years to be now slightly below its pre - pandemic average. a further decline is expected due to the ongoing pressure on household finances. graph 9 household consumption and saving quarterly % % real consumption growth - 5 - 5 - 10 - 10 % % net saving ratio average ( 2015 – 2019 ) sources : abs ; rba within the overall consumption figures there are divergent patterns ( graph 10 ). per capita spending on goods has softened recently, after surging during the pandemic. in contrast, per capita

share of working - age australians with a job has never been higher than it has been recently. the youth labour force participation rate is the highest it has been in a long time and the youth unemployment rate is the lowest that it has been in many decades ( graph 2 ). female labour force participation has also been at a record high. graph 2 youth labour market outcomes % unemployment rate % % % participation rate source : abs these are positive outcomes for the country and society as a whole. for decades, australia struggled to achieve what was considered to be full employment. too many people couldn ’ t find a job or the working hours they wanted. this was one dark spot on what has otherwise been a very successful economy over recent decades. there are still significant issues in our labour market, but the outcomes i have just highlighted are much better than most people thought likely, or perhaps even possible. there is a positive social and economic dividend to this. our communities are stronger when people who want to work can find a job and the hours they want. paid work not only generates incomes, but it also helps people develop skills and progress up the ladder of opportunity. the positive labour market outcomes largely reflect the policy stimulus during the pandemic – the same factor that lies behind some of the recent inflation. for a while, the disruptions caused by the pandemic made it more difficult for firms to operate and some had to hire extra workers to deal with this. but the more important factor has been the support to aggregate demand provided by both fiscal and monetary policy through the pandemic. this support was primarily designed to protect against catastrophic economic outcomes, which it successfully did. but, it also had the effect of underpinning a strong recovery in aggregate demand that has created jobs and achieved a substantial reduction in unemployment. as we battle with inflation, it is worth remembering there is another side too. i would now like to return to the battle against inflation. in the december quarter, the headline inflation rate reached 7. 8 per cent ( graph 3 ). this is the highest rate in more than three decades. graph 3 consumer price inflation * year - ended % % - 5 - 5 * excludes interest charges prior to the september quarter of 1998 ; adjusted for the tax changes of 1999 – 2000. sources : abs ; rba as we know from the 1970s and 1980s, high inflation is damaging and undermines people ’ s living standards. while the circumstances that gave rise to the current inflation are different