Commonwealth Bank of Australia's Household Spending Insights index rose slightly in August, easing from the higher pace seen in July.
The index rose 0.1% month-on-month in August, easing from the 0.6% pace seen in July, with annual growth also slowing to 4.7% on a seasonally adjusted basis from 5.2% in July.
"Spending indicators have been choppy in recent months, and seasonal factors have been strong, but nevertheless, we are seeing that household spending is tracking softer at this time of year compared to previous years," CommBank Head of Australian Economics Belinda Allen said.
The bank said the data points to a broad-based slowdown compared with the pace of growth recorded in late 2025 and this year, as weaker income growth and the fading wealth effect from softer home values begin to weigh on household budgets.
Transport was the standout category in August, rising 2% for the month and 9% over the year, even as spending on public transport declined, as CommBank noted that persistently high inflation and the trajectory of oil prices leave the Reserve Bank of Australia in a difficult spot.
Five of the 12 spending categories recorded gains in August while five recorded declines, with the strongest increases concentrated in essential areas including transport, insurance, up 0.9%, and health, up 0.3%, while hospitality edged up 0.1% and recreation was flat following a strong July.
Household goods spending fell 0.3% for the month, an area CommBank typically expects to soften first as the housing downturn and slower property turnover take hold, while education spending remained weak, down 5.5% over the year.
CommBank now expects the RBA to raise rates in September, moving up its previous call for a November hike, but the risk of a follow-up increase depends on upcoming inflation data and how the Middle East conflict and oil prices evolve.
ANZ also forecast a 25 basis point rate hike in September on Monday, along with its previous expectation of the same hike to be in November, which would take the cash rate to 4.85%.