Australian household spending fell 1.1% in April, unwinding most of March's sharp rise — but the headline number tells only part of the story for mortgage brokers tracking their clients' financial resilience.
Transport spending was the main culprit, falling 4.7% as the Middle East conflict continued to ripple through household budgets via higher airfares and elevated fuel costs.
"The 4.7% drop in transport costs was the main driver for the 1.1% fall in household spending in April," said Tom Lay, ABS head of business statistics, in a media release.
The federal government's halving of the fuel excise duty from 1 April softened the blow, with ABS experimental data confirming the decline was largely price-led — actual volumes of auto fuel spending rose 2% in the month.
Annual spending growth eased to 4.9%, down from 6.2% in March.
The fuel story, however, obscures a more persistent pattern of consumer stress.
Food spending fell 1.3%, and the structural shift in consumer behaviour showed no sign of reversing.
"The shift towards generic brands and cheaper products in supermarkets continued into April, reflecting ongoing price consciousness among households," Lay said.
Services spending bore the brunt overall, declining 1.9% against a 0.4% pull-back in goods. Clothing and footwear dropped 2.2%. Declines were recorded across all states, led by Western Australia at –1.9%, followed by Victoria at –1.5% and South Australia at –1.2%.
"The outlook for consumer spending remains gloomy, with consumer sentiment probing pandemic-era lows and discretionary card activity stalling," said Ryan Wells, economist at Westpac Group, commenting on the ABS data.
Separate data from the ANZ-Roy Morgan Consumer Confidence index puts a number on that gloom — 66.1 for the week ending 24 May, roughly 40% below the long-run average of 108.8 and close to a 50-year low.
With Westpac's forecast of –1% landing close to the –1.1% actual, the softness was anticipated, not a shock.
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