Australian household spending stalled in August as the winding down of the federal excise tax cut saw fuel prices rise sharply. Transport-related spending increased by 2.3% supported by EV sales while higher fuel prices weighed on spending across other categories. The RBA's tightening cycle has now delivered 100bps of rate rises in 2026 and that will weigh on the outlook for spending into next year.
Household spending recorded no growth (0%) in August, slowing from solid increases of between 0.9% and 1.2% over the past three months. Annual growth eased from 7% to 6.8%. Fuel prices rose after the Federal excise tax cut ended in July and as tensions in the Gulf flared again. That and strong EV sales saw spending in the transport category rise by 2.3%, propping up household spending amid falls in several other categories, notably in the discretionary spend area that slowed (-0.3%) for the first time since April. Excluding the transport category, household spending fell by 0.4% in the month.
The largest single category fall came in recreation and culture (-1.4%) as spending on sporting-related events eased. Clothing and footwear and alcohol and tobacco both saw falls of 1%. Meanwhile, spending on furnishings and household equipment declined (0.9%) for the first time since February. Hotels, cafes and restaurants (0.8%) were able to resist the broader trend, advancing for the fifth consecutive month.
