Australian spending defies cost-of-living crisis, stoking RBA rate hike fears
Falling house prices and overall cost-of-living pressure have failed to slow down Australian household spending, which may worry the RBA.
Commonwealth Bank spending data shows payments from its more than seven million customers were up 0.6 per cent in July.
Overall, 10 of the 12 spending categories rose, led largely by discretionary spending.
Leading the rise was recreation spending, up 1.1 per cent in July, while spending in hospitality increased by 1.0 per cent.
Commonwealth Bank credits this uplift in spending on households willing to pay for experiences, with July packed with major events including the FIFA World Cup and The Odyssey film.
Even though household spending increased in 2026, the uptick has so far been weaker than it was in 2025.
Commonwealth Bank senior economist Ashwin Clarke said households continues to prioritise spending on experiences and discretionary categories despite pressures on the family budget.
“That strength in discretionary we took as a sign households are willing to open up their wallets and spend,” he told NewsWire.
“They aren’t in a saving mindset yet and that certainly raises the risk that household spending won’t slow as the Reserve Bank expects.”
Despite the relative strength in household spending, the Commonwealth Bank still expects pressures including slowing wage growth, weakening house prices and inflation will slow household consumption going forward.
“We still expect household spending to slow, it just might take a bit of time,” he said.
“The fundamentals are pretty weak, but if household spending doesn’t slow over the next six months as we or the RBA expects, it will make them uncomfortable and perhaps make them consider if another rate hike is necessary.”
Discretionary items make up three of the top four contributors to overall annual growth, in particular spending on hospitality and recreation.
Household goods spend was also strong, supported by promotional activity at online marketplaces.
5News aggregated this summary from the outlet’s public feed. The full article, with all the context, is on www.perthnow.com.au — the content belongs to PerthNow.
