Inflation eased in April but JobAdder CEO Martin Herbst says it will not change employer behaviour overnight.
Australia’s headline inflation rate eased in April, dropping from 4.6% to 4.2% in the 12 months to April 2026, according to data released today by the Australian Bureau of Statistics. It is a move in the right direction after several months of accelerating price pressure, but the detail behind the headline number tells a more complicated story for small business owners watching input costs, consumer spending power, and the hiring environment.
What the numbers show
The fall in headline CPI was driven primarily by automotive fuel, which dropped 7% from March to April after the government halved the fuel excise on 1 April. Average regular unleaded petrol prices fell from 228 cents per litre in March to 206 cents per litre in April. Premium unleaded fell from around 249 cents to 228 cents per litre.
However, Sue-Ellen Luke, ABS head of prices statistics, was clear that the fuel excise cut does not undo the damage from the Middle East conflict. “Automotive fuel prices are still 23.5 per cent higher compared to February and before the impact of the Middle East conflict,” she said. The excise cut provided relief but it is relief measured against a significantly elevated baseline.
Trimmed mean inflation, which strips out the most volatile price movements including fuel in both March and April, edged up slightly to 3.4% in the 12 months to April, from 3.3% in March. That small upward tick matters because trimmed mean is the measure the RBA watches most closely when making rate decisions. Headline inflation fell, but the underlying pressure on prices that are harder to explain away with a single policy lever actually increased slightly.
The fuel picture
While petrol prices fell in April following the excise cut, diesel moved in the opposite direction. Average diesel prices rose 14% between March and April, climbing from 256 cents per litre to 292 cents per litre, even accounting for the excise cut. For businesses in transport, logistics, agriculture, and any sector dependent on freight, that number matters directly.
The knock-on effects of higher fuel and freight costs are showing up clearly in the data. Postal services rose 12.4% in the 12 months to April. New dwelling construction costs are up 4.7% annually. Luke noted that higher oil prices have flowed through to products and services with high freight and logistics costs, meaning the fuel shock is embedded in the cost base of a wide range of goods and services beyond petrol stations.
Housing and electricity
Housing remains the largest contributor to annual inflation at 6.3% in the 12 months to April, driven by electricity costs, new dwelling construction, and rents. Electricity costs are 22.5% higher than 12 months ago, reflecting the unwinding of Commonwealth and State government rebates that reduced household electricity bills in the prior year. That comparison will ease over time as the rebate period drops out of the 12-month calculation, but for now the electricity cost spike remains a significant pressure on both households and businesses running energy-intensive operations.
Of the 11 groups in the CPI, 7 recorded a slowdown in annual growth from March to April, with transport moderating the most. That broad easing is genuinely positive and suggests the inflation picture is moving in the right direction. But with housing, electricity, and diesel all still running hot, the relief reaching households and small business owners is partial rather than comprehensive.
What it means for hiring
For SME owners making hiring decisions, the April CPI data is a step in the right direction but not enough to change the calculus materially, according to Martin Herbst, CEO of recruitment software company JobAdder. “A dip in inflation is a step in the right direction, but it will not shift employer sentiment overnight,” he says. “Until the economic picture clears and the trimmed mean comes down consistently, businesses will keep hedging with flexibility over permanent headcount.”
JobAdder’s data shows job creation trending down, and Herbst expects that to continue through the next quarter at least. “One read will not change that,” he says. “Employers are saying ‘not yet’ or ‘not permanently’ until there is more stability.” The company’s Job Market Conditions Index sits at 48.1, reflecting a market still tilted toward employers rather than candidates. For small business owners who are hiring, Herbst’s practical advice for jobseekers is relevant context: candidates who come through established recruiter relationships are being placed faster than those applying cold, which signals that the quality of the hiring process matters more than volume right now.
For SME owners reading this data in the context of everything else happening in the economy, the April CPI result offers a cautious reason for optimism. Inflation is easing. The fuel excise cut is working at the petrol bowser. But diesel, electricity, housing costs, and underlying inflation are all still running well above the RBA’s target band. The path back to the 2 to 3% target is visible but it is not short, and the decisions businesses make about pricing, staffing, and investment in the meantime will matter considerably.
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