Key facts
- Australian household spending was flat in August at A$82.3 billion.
- Analysts had expected a 0.3% rise in August spending.
- Annual household spending growth was 6.8% in August.
- Transport spending rose 2.3% in August, driven by fuel costs.
- Recreation and culture spending fell 1.4% in August.
- Excluding fuel, household spending would have fallen 0.3%.
Australian household spending remained flat in August, failing to meet analyst expectations for a 0.3% rise, according to data from the Australian Bureau of Statistics. The total household spending indicator stood at A$82.3 billion for the month. This stagnation follows a stronger 1.1% increase in July and a 0.9% rise in June. Despite the flat monthly figure, annual spending growth remained resilient at 6.8%, indicating that consumers are still spending despite higher borrowing costs. This resilience is a key factor leading economists to expect the Reserve Bank of Australia to implement a fourth interest rate hike this year. Spending on transport, particularly fuel, saw an increase of 2.3% in August, with fuel spending alone rising 8.1%. This rise in transport costs offset declines in other categories, such as recreation and culture, which fell by 1.4%, and clothing and footwear. Excluding fuel, overall household spending would have decreased by 0.3%. CommBank data suggests a broader slowdown in spending compared to previous years, attributing it to slower income growth and the wealth effect from lower housing prices. The bank's head of Australian economics, Belinda Allen, noted that households are increasingly dedicating a larger portion of their budget to essentials like fuel due to high inflation and rising oil prices.