The CommBank household spending insights (HSI) index rose 0.3% in June, marking its third consecutive monthly increase following 0.4% gains in April and May, the bank said on Thursday.
The growth was led by a 2.9% increase in utilities, followed by gains in education and communications and digital categories.
Australians spent the least on hospitality, which fell 0.8%, and declines were seen in motor vehicle and recreation as well.
Household spending is showing early signs of stabilizing, with cautious optimism emerging as consumers gradually ease back into discretionary purchases, said Belinda Allen, CBA senior economist.
Across the June quarter, the HSI rose by 1.4%, slightly above the 1.2% increase in the March quarter but still below the 1.6% recorded in the December 2024 quarter.
Despite recent rate cuts, most mortgage holders continue to prioritise saving and debt repayment, and with the Reserve Bank of Australia unexpectedly holding rates at 3.85% in July, economists now anticipate a delayed recovery in household spending, with potential cuts in August and November, Allen added.
Homeowners without a mortgage recorded the weakest annual spending growth in June at 3.5%, while spending by mortgage holders and renters rose to 5.2% and 4.2% respectively.
New South Wales led the nation in household spending growth in June, rising 0.7% and 8.4% over the year, while Queensland rebounded to 7.3% following a slow post-cyclone recovery.
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