Australia’s household spending showed a slight lift in April, thanks in part to the Easter and Anzac Day holidays, but economists warned the consumer recovery remains sluggish amid persistent cost-of-living pressures and economic uncertainty
Spending growth was recorded in seven of 12 categories, led by insurance (+1.6%), hospitality (+1.4%), and communications and digital (+0.7%). Hospitality spending was notably supported by what analysts called the “super holiday” period of Easter and Anzac Day.
“Another soft month for household spending reinforces our view that a slower than expected consumer recovery is unfolding,” said Belinda Allen (pictured left), CBA senior economist. “This trend, along with global economic uncertainty, led us to recently downgrade our Australian GDP forecast for 2025.”
Allen added that while the February RBA rate cut and falling petrol and utility bills are helping, households remain “deliberate with their spending choices.”
“The recent pause of additional tariffs between the US and China could improve sentiment going forward, however we expect it will take additional interest rates cuts to improve momentum in consumer spending,” she said.
“We maintain our call for the RBA to cut rates by 25 basis points next week, with a forecast end of year cash rate of 3.35%.”
Spending on utilities fell by 2%—the steepest drop in any category—followed by transport (-0.8%), education (-0.7%), and household services (-0.7%).
Meanwhile, renters led annual spending growth at +2.4%, overtaking those with a mortgage (+2.2%) and outright homeowners (+0.7%).
“Renters in particular have increased discretionary spending which suggests that while consumers are making cutbacks in some areas, many are still making trade-offs and allocating a share of their wallet to areas like hospitality and recreation and more so in April given the additional public holidays,” Allen said.
Queensland posted the strongest monthly growth among the states at +0.8%, rebounding from severe weather impacts in March. At the time, it had recorded the weakest state growth at just 0.2%.
Discretionary spending was up 0.8%, while non-discretionary spending dropped 0.9%, indicating more targeted spending around holidays.
“Consumers cut back on goods spending (-0.4%) but still treated themselves and their families during public holidays and school holidays,” said Sally Auld (pictured right), NAB group chief economist, pointing to a 2.7% jump in hospitality spending.
Retail spending edged up 0.2%, while essential services spending fell 0.7%, with significant declines in utilities (-8.2%), education (-3.1%), and health and care (-0.7%).
NAB’s data also showed that consumers continue to focus on long-term value, with household goods spending up 9.4% year-on-year, and construction-related spending rising 2.8% in April.
However, personal goods categories like clothing (+1.2%) and department stores (+0.2%) remained weak, suggesting consumers are still limiting non-essential purchases despite easing inflation.
