Introduction to Australia’s Economic Data
Australia is set to release key economic data, which will provide insights into the country’s inflation and growth. The S&P Global PMIs for December were released yesterday, and they indicated that sticky services inflation may complicate the Reserve Bank of Australia’s (RBA) easing outlook despite softer growth signals.
Understanding the Economic Data
The data due for release today includes the Consumer Price Index (CPI) for November 2025. This data is crucial as it will provide a better understanding of how sticky inflation is in Australia. The CPI release is scheduled for 11:30 am local time (00:30 GMT/ 19:30 US Eastern time) and is expected to be a key test for the near-term outlook on RBA policy.
Expected Outcomes
Economists forecast that the November CPI will ease slightly to around 3.7% year-on-year from 3.8% previously. However, the focus will be on underlying inflation, where progress has been slower. The trimmed mean CPI, which is the RBA’s preferred core measure, is expected to remain above the 2-3% target range. This suggests that domestic price pressures are not yet cooling convincingly.
Challenges Facing the Central Bank
Recent data highlights the dilemma facing the RBA. While monthly headline CPI momentum has stabilized somewhat, services inflation and labor-driven costs remain sticky. Housing-related indicators, including building approvals, have been volatile, suggesting patchy momentum in the sector as higher borrowing costs continue to bite.
Importance of Today’s CPI Report
Today’s CPI report is set to be a critical input into market thinking on the RBA’s next policy step. With inflation risks finely poised, the report will provide valuable insights into the state of the Australian economy. The data will help to determine whether the RBA will increase interest rates or maintain its current stance.
Conclusion
In conclusion, today’s CPI report is a crucial piece of economic data that will provide insights into Australia’s inflation and growth. The report is expected to be a key test for the near-term outlook on RBA policy, and its outcome will have significant implications for the Australian economy. As the RBA navigates the challenges of sticky services inflation and labor-driven costs, today’s CPI report will be closely watched by economists and market analysts alike.
