Australian household spending continued to grow strongly as the June price index rose 10.2% year-on-year to 3.3%.
according to Australian Bureau of Statistics (ABS), June figures mark 16th Gross household spending increased for consecutive months.
“The spending categories most affected by the response to COVID-19 (transportation, hotels, cafes and restaurants, clothing and footwear) are now back to pre-pandemic levels,” said Head of Macroeconomic Statistics at ABS. Jackie Vitas said.
Rising gas prices and demand for flights pushed transportation costs up 22.7% in the month.
Other spending categories such as hotels, cafes and restaurants (+17.1%), clothing and footwear (+16.3%), and recreation and culture (+15.5%) also registered strong growth.
However, modest increases were seen in spending on health (0.8%), alcoholic beverages and tobacco (+0.9%) and food (+1.8%).
Among jurisdictions, Queensland had the highest growth in household spending in the 12 months to June at 12.4%, followed by Victoria at 11.8%, Tasmania at 10.8% and Western Australia at 9.7%. did.
The figures above do not take into account the impact of the Reserve Bank of Australia’s recent interest rate hike, which pushed the cash rate to 1.85% in August.
Consumer sentiment worsens as interest rates rise
Meanwhile, Australian consumer sentiment was hit hard by the central bank’s decision.
of ANZ-Roy Morgan Consumer confidence fell 4.5% in the week starting August 1, wiping out all gains in the past three weeks.
Consumer confidence in the current economic situation also fell 10.2%, its lowest level since September 2020, while indicators of consumer current and future financial conditions fell 1.9% and 5.5% respectively.
In addition, Joint research August consumer sentiment by Westpac Bank and the Melbourne Institute showed a 22.9% decline compared to November 2021, down 3% to 88.3%.
Westpac chief economist Bill Evans said August’s figures were similar to the lowest recorded during the COVID-19 pandemic and global financial crisis.
At the same time, the survey found interest rates continue to weigh on consumer confidence. His 58% of respondents expect cash rates to rise by more than his 1% over the next 12 months.