HomeAustralia household spending beats, up 0.8% in June (expected +0.2%, prior +1.
3%)Australia household spending beats, up 0.8% in June (expected +0.2%, prior +1.
3%)NewsEamonn Sheridan33 minutes agoAustralian household spending rose 0.8% m/m in June, well above the 0.2% forecast, following a 1.
2% May gain. Quarterly spending volumes rose 0.7%, driven by discretionary categories, adding to signs demand remains resilient despite three RBA rate hikes this year.
The scale of the beat, four times the consensus forecast and following an even larger jump in May, is likely to reinforce the view that consumer demand remains resilient despite three RBA rate hikes already delivered this year. With inflation still running high and the labour market holding up, this data point strengthens the case for the RBA to keep tightening rather than pause, since demand-side pressure shows little sign of cooling under current borrowing costs. The composition of the spending gain, led by discretionary categories such as hospitality, recreation and household goods alongside EV purchases, suggests this is not simply a story of necessity spending rising with prices, but genuine appetite for discretionary outlays.
Markets are likely to read this as supportive of further AUD strength and continued upward pressure on rate expectations.--- Australian household spending topped forecasts for a second straight month in June, underscoring resilient demand even as the RBA has already hiked three times this year against persistently high inflation.Summary:Australia's monthly household spending indicator rose 0.
8% in June to A$81.3 billion, well above the 0.2% increase analysts had expected.
The June rise followed an even stronger 1.2% jump in May.Spending for the whole June quarter rose 0.
7% in real terms to A$227.8 billion, following a 0.8% increase in the prior quarter.
The gain was driven by discretionary categories including alcoholic beverages and tobacco, recreation and culture, furnishing and household equipment, and hotels, cafes and restaurants.Consumers were noted splashing out on electric vehicles amid high petrol prices.The data lands against a backdrop of three RBA rate hikes at the first three meetings this year, with inflation still elevated and the labour market holding up reasonably well.
Australian household spending rose more strongly than expected for a second consecutive month in June, adding to evidence that consumer demand is holding up despite the Reserve Bank of Australia having already delivered three interest rate hikes so far this year.Data from the Australian Bureau of Statistics showed the monthly household spending indicator rose 0.8% in June to A$81.
3 billion. That comfortably beat analyst expectations, with economists having generally looked for a much smaller increase of around 0.2%.
The June result followed an even sharper 1.2% jump in May, meaning spending has now surprised to the upside for two straight months.On a quarterly basis, spending across the June quarter rose 0.
7% in real terms to A$227.8 billion, building on a 0.8% increase in the previous quarter.
The ABS attributed the gain to strength in discretionary spending categories, including alcoholic beverages and tobacco, recreation and culture, furnishing and household equipment, and hotels, cafes and restaurants. Consumers were also reported to be spending heavily on electric vehicles, a trend linked in part to persistently high petrol prices pushing households toward alternatives.The resilience in spending comes against a backdrop of a hawkish policy environment.
The RBA has raised interest rates at each of its first three meetings this year, moves aimed at bringing down inflation that has remained stubbornly elevated. Despite those hikes, the labour market has continued to hold up reasonably well, giving the central bank some room to keep tightening without an immediate deterioration in employment conditions.Thursday's spending figures are likely to reinforce the case that current borrowing costs have yet to meaningfully dent household appetite for discretionary purchases.
With spending accelerating rather than slowing in the face of higher rates, and inflation still running above target, the data adds to the argument that the RBA may need to maintain, or even extend, its current tightening path in order to bring price pressures fully under control. The composition of the spending gain, concentrated in categories such as hospitality, recreation and household goods rather than necessities alone, suggests underlying consumer confidence remains intact even as the cost of servicing debt continues to rise across the economy. ADVERTISEMENT - CONTINUE READING BELOWText SizeTagsAUDAdd as a preferredsource on GoogleMost PopularAustralia household spending beats, up 0.
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