Invest
Inflation concerns rise as Australia's CPI climbs to 3.8% in October
Australia's latest Consumer Price Index (CPI) figures have sent ripples through the economy, with headline inflation accelerating to 3.8% year-on-year in October, up from 3.6% in September. The data, released as part of the country's first monthly CPI read, has sparked concerns about the persistence of underlying inflationary pressures, particularly in the housing sector.
Inflation concerns rise as Australia's CPI climbs to 3.8% in October
Australia's latest Consumer Price Index (CPI) figures have sent ripples through the economy, with headline inflation accelerating to 3.8% year-on-year in October, up from 3.6% in September. The data, released as part of the country's first monthly CPI read, has sparked concerns about the persistence of underlying inflationary pressures, particularly in the housing sector.
Market Analyst at eToro, Farhan Badami, highlighted the significance of the trimmed mean, which surged to 3.3% – the highest since May. "That’s the highest trimmed mean read since May, signalling that underlying inflation is proving far stickier than hoped," Badami noted. The persistent inflationary pressures are evident in the housing market, where annual inflation is running at 5.9%, with rents up by 4.2%. Even a sharp 10.2% fall in electricity prices has failed to alleviate the financial burden on households.
The impact of these inflationary pressures is acutely felt by young Australians aspiring to own homes. "The sad news for young Australians is that the prospect of home ownership continues to drift further away," Badami remarked. Existing homeowners, too, face challenges, as mortgage repayments are unlikely to decrease in the near future. For everyday households, the October inflation figures merely affirm the financial strain they experience on a weekly basis.
The Australian dollar, however, saw a modest lift following the CPI release, providing a small boon for those planning overseas trips or holding positions in export stocks. Yet, the broader implications of the inflation data extend to monetary policy. The Reserve Bank of Australia (RBA) had already anticipated a slow return to the 2-3% inflation target, and the latest figures suggest an even more prolonged recovery period. "This pretty much confirms the RBA's easing cycle might be over before it really started," Badami said, indicating that the cash rate could remain at 4.35% through mid-2026. If inflationary pressures persist, there may even be pressure on the RBA to increase rates.
The labour market is also feeling the effects of inflation, as wage growth remains steady but shows signs of slowing. Ben Thompson, CEO and co-founder of Employment Hero, observed, "Wage growth holding steady this quarter suggests the market is finding its balance." The median total hourly rate has reached $45.20, as employers carefully manage pay rises amid higher labour costs. However, year-on-year wage growth has dipped, with Employment Hero's platform data revealing a 4.8% increase in October, compared to 5% in 2024.
Thompson attributed the slower wage growth to the challenges businesses face in navigating layers of legislation and compliance costs. "It’s never been a more expensive or confusing time to be an employer," he stated. Despite these challenges, businesses are striving to remain competitive and keep their operations afloat.
The inflationary pressures are causing unease among employers, as highlighted by Martin Herbst, CEO of JobAdder. "Inflation ticking up again will make employers nervous, and the labour market is already showing signs of strain," Herbst noted. JobAdder's data indicates that economic uncertainty remains a top challenge for 52% of recruitment agencies, while fee pressure affects 43% of firms.
The current job market is characterised by workers staying put, as changing jobs feels uncertain. Herbst emphasised the need for recruiters to build trust with candidates and help employers regain confidence in investing in their labour force. "The opportunities are out there, and it’s a great time to find talent, but we need to meet the market where it is," he said.
As Australia grapples with rising inflation and its impact on various sectors, policymakers, employers, and workers alike will need to navigate these challenges carefully to ensure economic stability and growth.
RELATED ARTICLES
Economy
October CPI results pose challenges for RBA’s monetary policy stance
In a surprising turn of events, the October Consumer Price Index (CPI) data has raised eyebrows among economists and market strategists, revealing stronger-than-expected inflationary pressures in ...Read more
Economy
Global deal activity declines by 6% amid economic uncertainty, reports GlobalData
In a year characterised by economic turbulence and evolving market conditions, global deal activity has witnessed a notable downturn during the first ten months of 2025. According to GlobalData, a ...Read more
Economy
Australia’s softening labour market puts another RBA cut in play — here’s what business should do now
A four-year high in unemployment has revived expectations the Reserve Bank could deliver another rate cut as soon as November. With quarterly GDP growth running at 0.6 per cent and annual growth at ...Read more
Economy
Rising CPI reinforces RBA’s stance as rate cut expectations remain: State Street
State Street Global Advisors says the Reserve Bank of Australia (RBA) is likely to hold its current policy outlook following the release of September quarter inflation data, which showed an unexpected ...Read more
Economy
NSW SES boosts tsunami preparedness ahead of World Tsunami Awareness Day
As World Tsunami Awareness Day approaches on 5 November, the New South Wales State Emergency Service (NSW SES) is ramping up efforts to enhance tsunami preparedness along the east coastRead more
Economy
Lifesaving Regional Response Strengthened with New NSW SES Vehicles
In a significant boost to regional emergency services, the NSW State Emergency Service (SES) has unveiled 11 new Community First Response (CFR) vehicles, designed to enhance the speed and safety of ...Read more
Economy
Australia's June quarter GDP growth driven by consumer and government spending
Australia's economy has shown unexpected resilience in the June 2025 quarter, with household and government consumption driving growth despite a significant decline in public investmentRead more
Economy
Australia's GDP surprise is real but operators should heed the growth mix warning light
Australia’s June-quarter growth beat expectations on the strength of household consumption and government spending, even as public investment sagged. The upside surprise signals resilience, but the ...Read more
Economy
October CPI results pose challenges for RBA’s monetary policy stance
In a surprising turn of events, the October Consumer Price Index (CPI) data has raised eyebrows among economists and market strategists, revealing stronger-than-expected inflationary pressures in ...Read more
Economy
Global deal activity declines by 6% amid economic uncertainty, reports GlobalData
In a year characterised by economic turbulence and evolving market conditions, global deal activity has witnessed a notable downturn during the first ten months of 2025. According to GlobalData, a ...Read more
Economy
Australia’s softening labour market puts another RBA cut in play — here’s what business should do now
A four-year high in unemployment has revived expectations the Reserve Bank could deliver another rate cut as soon as November. With quarterly GDP growth running at 0.6 per cent and annual growth at ...Read more
Economy
Rising CPI reinforces RBA’s stance as rate cut expectations remain: State Street
State Street Global Advisors says the Reserve Bank of Australia (RBA) is likely to hold its current policy outlook following the release of September quarter inflation data, which showed an unexpected ...Read more
Economy
NSW SES boosts tsunami preparedness ahead of World Tsunami Awareness Day
As World Tsunami Awareness Day approaches on 5 November, the New South Wales State Emergency Service (NSW SES) is ramping up efforts to enhance tsunami preparedness along the east coastRead more
Economy
Lifesaving Regional Response Strengthened with New NSW SES Vehicles
In a significant boost to regional emergency services, the NSW State Emergency Service (SES) has unveiled 11 new Community First Response (CFR) vehicles, designed to enhance the speed and safety of ...Read more
Economy
Australia's June quarter GDP growth driven by consumer and government spending
Australia's economy has shown unexpected resilience in the June 2025 quarter, with household and government consumption driving growth despite a significant decline in public investmentRead more
Economy
Australia's GDP surprise is real but operators should heed the growth mix warning light
Australia’s June-quarter growth beat expectations on the strength of household consumption and government spending, even as public investment sagged. The upside surprise signals resilience, but the ...Read more
