Australian household spending growth remained subdued at the start of 2026, according to Commonwealth Bank Senior Economist Ashwin Clarke. The ABS Monthly Household Spending Indicator showed a nominal increase of 0.3 per cent in January, partially offsetting a 0.5 per cent decline in December. Annually, spending grew by 4.6 per cent, which is approximately 0.4 percentage points below CBA’s forecasts, following revisions to the 2025 series. Commonwealth Bank is a financial institution providing a range of banking and financial services to individuals and businesses. The company operates across Australia and internationally.
Clarke noted that measurement anomalies in alcohol and tobacco, which decreased by 1.7 per cent monthly and 13.3 per cent annually, might be skewing the overall figures. Excluding these categories, spending saw a rise of 0.4 per cent for the month and 5.4 per cent over the year. This, combined with weaker-than-expected household consumption data in the National Accounts and an annual inflation rate of 3.8 per cent, suggests that the household sector’s momentum is somewhat softer than previously anticipated.
Despite the slower start to the year, Clarke pointed out that the monthly indicator’s track record in predicting quarterly spending outcomes has been inconsistent. CBA anticipates a further moderation in household spending throughout 2026, driven by reduced disposable income growth and a higher cash rate environment. These factors are expected to put downward pressure on consumer spending in the coming months.
Across different states, Western Australia recorded the strongest annual spending growth at 6.8 per cent, followed by Tasmania at 5.9 per cent and Queensland at 5.6 per cent. In contrast, Victoria, with 3.2 per cent, and the Australian Capital Territory, at 2.9 per cent, experienced slower growth rates compared to the national average.
