[REVISION HISTORY]

Australia's growth lag, jobs surge, inflation eases

Updated 2 times since CLSTR started tracking revisions of this situation.

What changed

2026-07-30 11:44 UTC → 2026-07-31 15:51 UTC · added ~~removed~~

Australia’s economy continues to miss its 2.5 % growth target, with Q2 2026 GDP up only 0.3 %. The labour market stayed resilient in June, adding 76,300 jobs – the strongest monthly gain since April 2025 – with part‑time hires accounting for 47,000. Unemployment held at 4.4 % and the participation rate edged to a one‑year high of 67.0 %. The Reserve Bank of Australia kept the cash rate at 4.35 % after three hikes this year. June CPI fell to 3.8 % y/y, driven by a 10.9 % drop in fuel prices, while core inflation remained at 3.6 % and housing costs stayed high at 6.8 % y/y. Market expectations of an August rate rise slumped to roughly 4 % (down from about 21 % after the May data). The Australian dollar slipped another 0.4 % to US$0.6949, and three‑year government bond yields fell 10 basis points to 4.48 %. The ASX rallied on the softer data, though analysts stress that housing and electricity price pressures remain elevated. Further CPI data for Q2 showed headline inflation rising only 0.6 % and the trimmed‑mean measure up 0.8 % y/y, reflecting lower auto‑fuel prices, a temporary fuel excise tax cut and falling global oil prices. Westpac’s chief economist said the bank no longer expects any additional RBA rate hikes in 2026, leaving the cash rate at 4.35 % as a restrictive stance. RBA Governor Michele Bullock reiterated that the board stands ready to raise rates further if inflation does not ease, while productivity projects continue amid concerns that any additional tightening could tighten financial conditions.

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