Annual CPI inflation eased from 4.6% to 4.2%, with transport prices moderating the most.
Published 28 May 2026
The Australian Bureau of Statistics released its Consumer Price Index figures for April 2026 on 28 May, and the headline number moved in the direction households have been hoping for. Annual inflation eased to 4.2%, down from 4.6% in the year to March. It is a modest improvement, but after a long stretch of cost-of-living pressure, any slowing in the pace of price rises matters for family budgets. Here is what the data actually showed.
According to the ABS media release, Sue-Ellen Luke, ABS head of prices statistics, said annual CPI inflation in the 12 months to April was 4.2%, falling from the 4.6% annual inflation to March. It is important to be clear about what this means: prices are still going up. An annual rate of 4.2% means the general price level in April was 4.2% higher than a year earlier. Inflation would only be negative, a situation called deflation, if prices were actually falling. So while the trend is encouraging, the cost of the typical basket of goods and services is still climbing.
| Measure | Year to March 2026 | Year to April 2026 |
|---|---|---|
| All groups CPI (annual) | 4.6% | 4.2% |
| Trimmed mean (underlying) | 3.3% | 3.4% |
Housing, which carries the highest weight in the CPI, was again the largest contributor to annual inflation, rising 6.3% over the year. Transport rose 6.6%, but that was a notable easing from the 8.9% recorded in the year to March, and the ABS said transport moderated the most of any group. Food and non-alcoholic beverages, a category that affects every household, rose 2.8% over the year. The table below shows how the annual movement in each of the 11 CPI groups changed between March and April.
| CPI group | Year to March 2026 | Year to April 2026 |
|---|---|---|
| Food & non-alcoholic beverages | 3.1% | 2.8% |
| Alcohol & tobacco | 4.4% | 4.3% |
| Clothing & footwear | 7.1% | 5.9% |
| Housing | 6.5% | 6.3% |
| Furnishings, household equipment & services | 1.4% | 1.2% |
| Health | 3.0% | 4.0% |
| Transport | 8.9% | 6.6% |
| Communications | 1.4% | 1.5% |
| Recreation & culture | 2.8% | 2.5% |
| Education | 4.8% | 4.8% |
| Insurance & financial services | 2.8% | 3.0% |
While the headline rate fell, the trimmed mean, a measure of underlying inflation that strips out the largest price moves in either direction, rose slightly to 3.4% from 3.3%. The ABS noted that automotive fuel was excluded from the trimmed mean in both March and April. The gap between the falling headline rate and the steady underlying rate suggests that some of the improvement came from volatile categories rather than a broad cooling of price pressure. Underlying inflation is the measure the Reserve Bank tends to watch most closely, because it gives a cleaner read on the persistent part of inflation.
For a typical household, the practical takeaway is that the squeeze is easing but not over. If your pay has risen by less than 4.2% over the past year, your real income, what your money actually buys, has still gone backwards. The most useful thing you can do is compare your own pay rise to the CPI and look at where your spending is concentrated. With housing and transport still the heaviest contributors, the categories driving the index are the same ones that dominate most family budgets. The next monthly CPI release from the ABS will show whether April's improvement carries through.
Disclaimer: This article summarises data published by the Australian Bureau of Statistics and is general information, not financial advice. Figures are drawn from the ABS Consumer Price Index, Australia release for April 2026. For advice on your own circumstances, consult a qualified professional.