Australia’s central bank is yet to bring inflation to heel and fresh monthly consumer price data should hopefully hint at a little more progress.
Economists expect the monthly consumer price gauge from the Australian Bureau of Statistics to moderate to 3.4 per cent in April, from 3.5 per cent in March.
Any signs of easing price pressures will be welcomed by households worn financially thin by the elevated cost of living and higher borrowing costs.
Yet Treasurer Jim Chalmers was out warning the monthly measure could bounce around ahead of the data release on Wednesday.
There were a few reasons to expect a stronger April number, including elevated petrol prices and higher travel costs due to the timing of Easter and school holidays.
“We are making welcome and encouraging progress in the fight against inflation, but we know there is more work to do because inflation is still too high and people are under pressure,” Dr Chalmers said.
Slow progress against inflation has been worrying the Reserve Bank as it walks a narrow path between taming prices without tanking the economy and unwinding gains in the jobs market.
Interest rates are working to temper demand and slow consumer spending, with retail sales lifting a meagre 0.1 per cent in April.
Lacklustre spending is putting pressure on retailers with a 35 per cent increase in insolvencies recorded by CreditorWatch in the sector year to April.
Hiring by retail, hospitality and tourism businesses has also slowed considerably, in a sign of weakening economic activity.
Small businesses in general are growing headcount at about half the rate as they were in April last year, according to the latest Employment Hero SME index.
Employee growth was down sharply from 11 per cent in the year to April 2023 to six per cent in the last 12 months with retail, hospitality and tourism firms logging lower growth than other sectors.
Employment Hero chief executive officer Ben Thompson said rising wages and operational costs also captured in the report would “see a significant number of small and medium-sized businesses struggle to survive”.
“This would have profound implications not only for the businesses themselves but for the broader economy, as small and medium-sized businesses are vital for job creation and innovation,” he said.