EconomyIntel Weekly Brief – 27 September 2026
Australia's economy is operating at trend growth with inflation steady but above the RBA's 2–3% target band. Trimmed mean CPI sits at 3.6% year-on-year and inflation composition remains broad. The labour market is softening, with unemployment at 4.65% and real wages declining. Monetary policy is neutral. The base case assigns 56.4% probability to continued transition, with 35.3% probability of stagflation and 8.3% probability of expansion. System health is strong at 92, though consumer sentiment and two sectoral indicators show pressure.
The scenario distribution framing this edition.
Published analysis · evidence-led read
The Australian economy recorded 0.4% quarterly GDP growth and 2.12% annual growth, marking trend conditions. The output gap stands at -0.2%. Headline CPI is 3.5% year-on-year and trimmed mean inflation is 3.6%, both above the RBA's 2–3% target band. Inflation is flat and broad in composition. The unemployment rate is 4.65%, sitting 0.15 percentage points above NAIRU. Wage growth is 3.2% year-on-year while real wages fell 0.29%. The cash rate is 4.35% against a Taylor rate of 4.55%, placing the policy gap at -0.2%. Policy is neutral. The labour market is softening without creating tension with the policy stance.
Published analysis · evidence-led read
Trimmed mean inflation at 3.6% remains 1.1 percentage points above target. Inflation is flat in direction and broad in composition, with many components sitting above the 2–3% band. Wage growth of 3.2% is running below headline price increases, producing real wage contraction of 0.29%. The combination of steady inflation above target and negative real wage growth continues to compress household purchasing power. Inflation breadth indicates persistent price pressure across the basket, even as the pace of increase has stabilised. The inflation gap of 1.1 percentage points leaves the trimmed mean well outside the target band.
This is general economic intelligence only. It does not constitute personal financial advice. Always consult a licensed financial adviser before making investment decisions.