Black Friday sales and a busy calendar of sporting events and concerts saw Australian household spending rise 1% month-on-month in November. This comfortably outpaced expectations (0.6%) and followed October's 1.4% acceleration - the fastest increase since the start of 2024. Household spending has risen for 14 months on end and annual growth has worked its way up to its fastest pace in more than 2 years at 6.3%. Market pricing attaches a low probability to the RBA raising rates upon its return in February, with last week's November CPI report indicating that upside risks to the RBA's inflation outlook were well contained in the final quarter of 2025.
Gains of 1.4% in October and now 1% in November show there was an acceleration in household spending towards year-end - though December could see a slowing. Discretionary categories have led the way with gains of 1.7% in the prior month and then 1.2% in November. The widening footprint of Black Friday where retailers are starting discounting periods earlier and major events have been key drivers. Meanwhile, the three RBA rate cuts in 2025 and higher real income growth are probably also at play. Annual growth in discretionary spending is now tracking at a 2½-year high at 6.1%.
In November, sporting events including the Spring racing carnival and many high-profile concerts supported services spending (1.2%) while goods spending (0.9%) rose on Black Friday. These outturns saw annual growth in service spending rise from 6.5% to 7.8% - its fastest pace in almost 2 years - though goods spending was little changed at 4.9%.
Spending in November rose in all except for one of the nine categories tracked by the ABS, with alcoholic beverages and tobacco falling by 1.8%. Gains in the other eight categories were led by a 2.2% increase in furnishings and household equipment and by a 2% lift in clothing and footwear, both benefitting from Black Friday.
Recreation and culture rose by 1.7% to be up by 8.6% over the year - its fastest annual pace in 2½ years. The Spring racing carnival in Melbourne and a number of major concert tours during November were key contributors. This generated associated spending at hotels, restaurants and cafes (1.2%) and transport (1%).
