Australian households kept up their spending streak in October, with the CommBank Household Spending Insights (HSI) Index climbing 0.6 per cent, matching September’s lift and marking the thirteenth straight month of growth.
Spending rose in 11 of 12 categories, led by Transport (+1.2 per cent ), Motor Vehicle (1.0 per cent) and Hospitality (+1.0 per cent) categories, as Australians continued to spend on filling up the car, looking after their car, eating at restaurants, and ordering take away and food delivery.
Is inflation driving the boost in spending?
While household spending appears better, inflation is likely distorting the picture.
“The recent strength in spending is likely being driven partially by price increases rather than purely higher consumption volumes,” said Belinda Allen, Head of Australian Economics at CBA.
“That’s important because it complicates how we interpret household resilience and how the Reserve Bank of Australia reads the economy as it weighs future interest rate decisions.”
Categories seeing the sharpest annual gains - Utilities (+13.8%), Communications and Digital (+10.1%), and Hospitality (9.1%), are also among those most affected by inflation and the scaling back of government support on energy costs.
Where are Australians spending more this year?
Changes to energy rebates have boosted utility spending over the year, while higher prices and evolving consumer habits are driving growth in digital categories, such as streaming services, online gaming, and mobile data.
While these patterns suggest households are adjusting to inflation by prioritising essential and at-home entertainment spending, Hospitality has also witnessed strong spending growth driven by food delivery and eating out.
