New data shows unexpected change in how Aussies spend money

Australian households are spending again, particularly on services, as consumer spending reaches its highest levels since November 2023.

Household spending jumped 0.5 per cent in July, according to the Australian Bureau of Statistics.

This follows a rise of 0.3 per cent in June and 1 per cent in May.

ABS head of business statistics Robert Ewin said household spending had now gone up nine of the last 10 months.

“Household spending is 5.1 per cent higher than the same time last year. This is the highest annual growth since November 2023.”

Households spent more on health services, hotel accommodation, air travel, and dining out during July, lifting services spending by 1.6 per cent.

This was offset by falls in goods spending, which was down 0.3 per cent following the end of financial year sales.

“Real income growth is firming due to a combination of steady wage growth and slower inflation,” Oxford Economics Australia head of macroeconomic forecasting Sean Lancake said.

“Further, interest rate and income tax cuts are working to boost households’ spending power.”