Australian household spending rose by 0.5% in July, a solid outcome on the back of yesterday's National Accounts for the June quarter that showed signs of a long-awaited revival in household demand (see here). Services-related categories (1.6%) were the key driver of growth in spending as goods spending softened (-0.3%).
Household spending lifted for the third month running with a 0.5% rise coming through in July. This lifted annual growth from 4.6% to 5.1%, its fastest pace since November 2023. Most categories contributed positively to spending growth in the month, including health (1.8%), transport (1.5%), other goods (1.5%), hotels and cafes and restaurants (1.4%) and recreation and culture (0.2%). Those gains were partly offset by falls in alcoholic beverages (-1.9%), furnishings and household equipment (-1.4%), clothing and footwear (-1.2%) and food (-0.1%).
The composition of spending growth skewed towards non-discretionary purchases (0.8%m/m) over the discretionary segment (0.4%m/m). In annual terms, non-discretionary spending (5.9%) is outpacing discretionary spending (4.6%).
