Wednesday's figures from the Australian Bureau of Statistics further show consumers are enjoying reprieve at the petrol pump and when paying electricity bills, but rents and groceries are still rising strongly.
The bureau's monthly report provide a steer on price moves but are more volatile than the quarterly figures, which the Reserve Bank of Australia watches more closely.
Treasurer Jim Chalmers says inflation numbers are tracking in the right direction. (Russell Freeman/AAP PHOTOS)
The trimmed mean measure cooled to 3.2 per cent in November, down from 3.5 per cent.
State Street Global Advisors APAC economist Krishna Bhimavarapu said "we can now confidently say that disinflation is running apace".
"The annual trimmed mean (3.2 per cent) continued moving towards the Reserve Bank of Australia's target band, and on a more encouraging side, inflation in the new dwellings category was the weakest since mid-2021," he said.
The central bank has been putting more emphasis on underlying inflation measures as they are better insulated from volatility and temporary price changes from the likes of power bill relief.
For EY senior economist Paula Gadsby, evidence of persistent services inflation in Wednesday's consumer price index was reason for the RBA to stay cautious.
The economist said the central bank would need further evidence prices were moderating from December quarter inflation numbers, due for publish at the end of January, and ahead of the RBA's February meeting.
"Lacklustre productivity growth, a resilient labour market, and strong government spending could keep inflation elevated," she said.
"This likely points to the Reserve Bank board keeping the cash rate at 4.35 per cent through the first quarter of this year, and possibly later."
Indeed, November's headline annual inflation rate inched higher to 2.3 per cent, from 2.1 per cent.
While an increase was expected, the uptick slightly exceeded expectations of a 2.2 per cent result.
ABS head of prices statistics Michelle Marquardt said the rise in annual headline inflation in part reflected the timing of government energy subsidies.
"In some states and territories, households received two rebate payments in October in lieu of not receiving a payment in July," she said.
"From November most households received one payment."
Treasurer Jim Chalmers said both the headline and underlying numbers were tracking in the right direction.
"Headline inflation has now been in the bottom half of the Reserve Bank's target band for three months in a row, for the first time since 2021," he told reporters on Wednesday.
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