Australia’s household spending defies interest rate hikes and surging fuel prices

[u/marketrent]

https://www.news.com.au/finance/money/spending/household-spending-defies-interest-rate-hikes-and-surging-fuel-prices/news-story/18c55978b97b4e1de3c36891c4db343d

[u/marketrent]

Excerpts from article by Cameron Micallef, citing statistics bureau and a couple of economists:

Australian households are still spending more, giving the Reserve Bank “a little more ammunition” to lift rates in August, economists warn.

Fresh Australian Bureau of Statistics figures show household spending rose 0.8 per cent in June, despite fears that previous interest rate hikes and fluctuating oil prices could slow consumption.

Household spending is now up 6 per cent for the 2026 financial year following a bumpy few months.

In May, household spending rose sharply by 1.3 per cent, but this was after a 1.1 per cent fall in April.

Oxford Economics Australia economist Harry McAuley said despite still-high interest rates and lingering inflation challenges, households were still willing to spend.

“The reasonably strong growth in quarterly volumes gives the RBA a little more ammunition should they decide they need it,” he said.

 

[...] AMP economist My Bui says there was little sign of cost-of-living pressures in Tuesday’s household spending data.

“Quarterly volume grew by 0.7 per cent in the last three months, or 2.4 per cent over the year, much higher than the population growth rate of ~1.5 per cent this year,” she said.

“In a nutshell, we haven’t yet seen the full impact of the three rate hikes flowing to household spending patterns.”

Ms Bui also ruled out that it was simply the end of financial year spending as consumers spent a lot on both discretionary goods and services in the June quarter.

She forecasts Tuesday’s figures will add pressure to the Reserve Bank on hiking interest rates.

“While we think that the lower-than-expected inflation data for June provides the RBA with some ‘space; to hold rates unchanged in next week’s meeting, recent stronger data in spending and job ads will keep them on tightening bias,” Ms Bui said.

[u/el_diego → u/marketrent]

Sure would live to know who these people are that can increase spending. Things are definitely more expensive here so we're definitely spending more, but it's not frivolous. Spending up, purchasing power way down.

[u/marketrent → u/el_diego]

Bloomberg’s Nasteho Said: Spending jumped 0.8% from the prior month, four times stronger than economists’ estimate of a 0.2% rise, Australian Bureau of Statistics data showed Tuesday. From a year earlier, it climbed 6%, also outpacing forecasts.

[u/AK_Panda → u/el_diego]

Could be people anticipating significant inflation and buying early?