Australian household splurging on non-essentials in June amid easing inflation figures

Australians have been splashing out on new cars, food and electronics as price pressures ease.

Household spending rose 0.5 per cent in June on top of a one per cent increase in May as shoppers shelled out for new goods, official figures show.

Spending on furnishings and household equipment led the charge, growing by two per cent, while clothing and shoes rose by 1.6 per cent and food increased by 1.5 per cent in Australian Bureau of Statistics data released on Tuesday.

Australians spent less on alcohol and tobacco, health and eating out in June.

Compared to same month in 2024, Australians spent 7.9 per cent more on recreation and culture and 7.5 per cent more on food, with household spending overall sitting 4.8 per cent higher.

Data for the June quarter showed a third consecutive rise - of 0.7 per cent - in the volume of household spending to $217.8 billion, driven largely by non-essential purchases on things like recreation and culture, and hotels, cafes and restaurants.

The figures reflect “a steady improvement in consumer confidence as price pressures eased over the year”, the bureau’s head of business statistics Robert Ewing said.

Household spending grew in all but one Australian state or territory, with the NT experiencing the biggest rise. The only fall was in WA where it dropped 0.3 per cent.

The results were echoed by a lift in consumer confidence to its highest level in three years amid falling inflation and growing hopes of an interest rate cut.

Roy Morgan’s weekly consumer confidence index, also released on Tuesday, showed a rise of 3.9 to surpass 90 points for the first time since May 2022.

The Reserve Bank is widely tipped to cut interest rates at its August meeting after a surprise decision to leave the cash rate unchanged in July.