Australian households are bearing the brunt of the central bank's determination to stuff the inflation genie back into its bottle, but not so much that business is suffering.
Companies - particularly those in the manufacturing, accommodation and food, financial and insurance services, and professional service sectors - are bringing home the bacon on the back of robust trading conditions.
Gross company operating profit soared by 16 per cent in the 2022 calendar year as wages and salaries - including manager payouts - grew by 11.6 per cent, according to the Australian Bureau of Statistics' business indicators data for the December quarter.
Yet consumer confidence is down as the Reserve Bank of Australia continues to pound out monthly interest rate rises.
Matt Comyn, the CEO of Australia's biggest lender Commonwealth Bank, noted this week the disconnect between the mood of households and business.
"Across the board from a business perspective, clearly trading conditions are really, really strong," he said on Tuesday at a business summit hosted by The Australian Financial Review in Sydney.
"But if you look at consumer sentiment and intentions data, you would think we are in the middle of pretty significant economic shock, which we aren't."
Just hours later, the RBA delivered its 10th monetary policy tightening since May last year, lifting the cash interest rate to 3.60 per cent.
As governor Philip Lowe acknowledged this week, household borrowers are feeling the interest rate pain.
"Total required mortgage payments are expected to reach nine per cent of household disposable income later this year, which will be around a record high," he told the summit.
Counselling services are reporting spikes in calls about financial issues, including Lifeline which saw a rise of 49 per cent between August and January in calls asking for help and advice with bills, food and crisis accommodation.
Mr Comyn said recently he had listened in on six or seven calls from stressed customers seeking assistance with mortgage payments or personal loans.
While those customers faced challenging circumstances, such as family illnesses, in aggregate the number of stressed borrowers seeking temporary financial relief was about 20 to 25 per cent below the levels seen before the pandemic.
Woolworths chief Brad Banducci noted food costs - particularly chicken, dairy products, fruit and vegetables (depending on supply) and red meat - had risen.
More customers were making use of the supermarket giant's online budgeting tools.
"We worried about baby dairy, which for good reasons is inflated, or bread for again, good reasons, is inflated," he told the summit.
But food inflation, for some items, is coming back, albeit slowly.
"There are positive movements, but it just takes time and I think we underestimate how long it takes for things to flow through the value chain," Mr Banducci said.
In 2022, the cost of food and non-alcoholic beverage rose by 9.2 per cent, dairy and related products gained almost 15 per cent, and fruit and vegetables rose 8.5 per cent, ABS data shows.
On the retail side, department store operator Myer announced a supersized profit on record half-yearly sales growth of 24 per cent to almost $2 billion on Thursday.
The group, which sells fashion, cosmetics, homewares and electricals, doubled its interim earnings to January 28 to $65 million.
Despite this, CEO John King is cautious about the outlook, citing concerns the economy is heading for a slower growth path.
For some time now, the central bank has been worried about a rare price-wage spiral in Australia - where the higher cost of goods and services prompts workers to chase higher wages, rather than the other way around.
Dr Lowe appeared more comfortable with this risk, saying the likelihood is now low, and pointed out that inflation likely peaked in December at 8.4 per cent and is trending down.
"Overall, we expect that inflation will trend lower this year and next, but there is still uncertainty about the exact path," he said.
"Inflation is still too high and it will be some time yet before we are back within the two-three per cent target range."
Generally, RBA rate movements can take up to a year-and-a-half to flow through the economy.
Australia is almost at the one year mark, which implies there's a way to go to see further falls in the inflation rate.
But Dr Lowe also appears to be optimistic, saying the bank would consider pausing its hiking cycle over the next few months raising expectations Australia could see a final hike in this cycle by mid-year.
This has been touted as good news for mortgage holders, which is highly debatable.
Those who've already borne the brunt of higher rates will have to find room in their budgets to pay off home loans at elevated levels of around eight per cent on a variable basis for the foreseeable future. No one is talking about if and when rates might come down.
"It's difficult because monetary policy is falling unevenly across the community, and the people who are being most affected are people who borrowed in recent times and are having to pay higher mortgage payments," Dr Lowe said.
"So that's where the effect is being most felt ... and I know it's tough."
Dr Lowe revealed people write to tell him about how it's affecting their families and their mental health.
He plans to meet with suicide prevention groups and Lifeline to talk about what they're hearing in the next month.
"It weighs heavily on my heart and the hearts of the board members."
Still, the governor argues the alternative would have been worse if inflation hadn't been addressed.
As it is, some people are getting deposit rates on their savings as high as four per cent or more per annum - the best in years.
And so far, by the bank's own admission, businesses seem to have avoided most of the pain.
But workers can expect to hear more from business groups as the Fair Work Commission prepares to hand down its annual wage review for low paid workers in the coming months.
Last year, the commission increased the wage for millions of workers by 5.2 per cent per annum - the highest rise in 16 years.
Whether or not that happens again remains to be seen but in theory, some relief for workers should be on the cards given high inflation.
Written submissions for the 2022/23 review close at the end of this month, ahead of an expected announcement in June.
