Australian household spending continued its upward trajectory in October, according to the CommBank Household Spending Insights Index. The index rose by 0.6 per cent, mirroring the previous month’s increase and marking the thirteenth consecutive month of growth. This sustained spending highlights ongoing resilience among Australian consumers.
The primary drivers behind the October increase were higher expenditures in transport, motor vehicles, and hospitality sectors. However, CBA economist Belinda Allen cautioned that much of this apparent strength likely reflects elevated prices rather than increased consumption volume. This distinction poses a challenge for the Reserve Bank of Australia (RBA) as it assesses the true strength of household spending amid persistent inflation.
Annual spending gains were most pronounced in utilities, communications, and hospitality—sectors heavily influenced by inflationary pressures and reduced government support measures. Geographically, Queensland and Western Australia recorded the strongest annual spending growth, while Tasmania experienced relatively slower growth compared to other states.
Looking ahead, Commonwealth Bank anticipates that the RBA will maintain the current cash rate at 3.60 per cent. The bank also indicated that persistent inflationary pressures could soon begin to negatively impact discretionary spending, potentially leading to a slowdown in household consumption in the coming months.
