Australian household spending lifts in March as consumers loosen purse strings at the footy, Formula One

Australian household spending lifted in March as consumers loosened their purse strings at the Melbourne Grand Prix and football matches as the AFL kicked off a new season.

Commonwealth Bank’s latest household spending insights — based on de-identified payments from about seven million of its customers — lifted 0.9 per cent in March, buoyed by a lift in recreation and hospitality categories.

CBA said hospitality recorded its first rise in spending since December, boosted by the Formula One in early March and other key sporting events.

Modest gains were also recorded across the other 11 spending categories tracked by the bank, led by education, which surged 4.3 per cent amid rising tuition fees and the start of the academic year.

But CBA senior economist Belinda Allen warned that while the spending rebound in March was encouraging, it was premature to call it a turning point.

“We expect interest rate cuts over the coming year to see consumers loosen their purse strings, but global uncertainty from the US tariffs may impact this recovery,” she said.

“It’s worth noting Australia is well placed to weather the global economic volatility and remains in a structurally sound position with limited direct impacts from the US tariffs. At the same time, the Reserve Bank has room to cut rates if required.”

Over the past 12 months, household spending was up 5.6 per cent, with the strongest gains concentrated in essential services — like insurance and health — where inflation remained elevated.

Renters continued to show the weakest growth spending, with an annual rate of 2 per cent. This was well below owners with a mortgage (up 3.2 per cent) and those who owned their home outright (up 3.5 per cent).

Earlier this week, Westpac revealed consumer sentiment had plunged to a six-month low after US President Donald Trump’s sweeping tariff triggered carnage on global stock markets.

The survey measures confidence based on assessments of family finances, expectations for the economy and whether now was “a good time to buy a major household item”.

Sentiment towards the economy showed a clear tariff-related deterioration. Around family finances, consumers are feeling a tighter pinch now and less positive about the outlook. Consumers were also less confident about the prospect of further interest rate cuts.

Major investment bank Deutsche Bank had also tipped a mega interest rate cut of 50 basis points at the RBA’s next meeting in May. This would take the cash rate to 3.6 per cent.

But big four bank NAB said it was concerned about the impact on growth and unemployment and said on Thursday it expects a double-cut in May.

RBA governor Michele Bullock seemed to pour cold water on that forecast. She said the Reserve Bank would remain patient while watching the fallout from the global trade storm and did not want to add to the uncertianty.

“The Australian financial system is strong and well placed to absorb shocks from abroad,” she said.