A report published this week by the Committee for Economic Development of Australia (CEDA) placed the nation's combined measure of unemployment and inflation close to its highest point since the pandemic period, with conditions unlikely to ease before late 2028.

Three variables — unemployment, inflation, and prevailing interest rates — feed into the index as a way of gauging the financial pressure felt by households, drawing on figures spanning from 2007 through to June 2026. According to CEDA's findings, the progress recorded from 2023 onward has been fully reversed, with elevated prices and the weight of high borrowing costs continuing to weigh on households and businesses.

Persistent price pressures stand out as a key force shaping that forecast, with inflation not projected to settle back within the midpoint of the Reserve Bank's two-to-three per cent target band before March 2028. Bureau of Statistics figures for September put the jobless rate at 4.7 per cent, after roughly 40,000 people across the country lost their jobs during that month.

Borrowing costs sitting near a 15-year peak, combined with a prolonged run of inflation above the official target, are pushing an additional layer of financial pressure onto households. Easing conditions across the labour market could provide the Reserve Bank with sufficient latitude to pause before delivering a fifth consecutive rate increase ahead of the holiday period.

CEDA's head of economics, Liam Dillon, noted that employment conditions had been the primary stabilising force for an Australian economy under strain, with households facing simultaneous pressure from elevated prices and rising mortgage costs throughout the year — a burden offset, in his view, by a jobs market that had held near historically low unemployment over recent years.

Joblessness held at roughly 4 per cent on average from early 2022 through to mid-2026, a rate that sat below the 4.4 per cent recorded in New Zealand and well under the 6 per cent figure posted in Canada over that same stretch. Roughly 177,000 positions were added to the workforce in the period spanning the year to date.

How Australia's cost pressures weigh on households today stands apart from the patterns that defined the pre-pandemic period. High unemployment rates during that period contributed to widespread economic strain across much of the decade. Elevated living expenses and the cost of borrowing were identified by CEDA as the key drivers behind the uptick.

Dillon's position is that raising productivity across the economy stands as the one approach capable of simultaneously easing inflation, lowering interest rates, and reducing unemployment, with Dillon describing output growth as the sole mechanism able to address all three measures of economic hardship at the same time. The case put to employers was that wage increases need not feed through to higher prices — and that threading that needle would simultaneously ease pressure on interest rates, protect employment levels, and lay the groundwork for a less fractious economic climate.