Australian household spending rose 1.3% in May

In Short:
– Australian household spending rose 1.3% in May, recovering from a 1.1% decline in April.
– Food spending increased by 1.1%, with Western Australia showing the highest growth at 2.6%.

Australian household spending increased by 1.3% in May, recovering from a 1.1% decline in April, as reported by the Australian Bureau of Statistics.All nine major consumption categories experienced gains, with the most significant rises in clothing and footwear at 2.7%, miscellaneous goods and services up by 2.2%, and transport spending climbing 1.4%.

Spending increases reported

Food expenditure rose 1.1%, reflecting recovery from previous April declines driven by higher grocery prices.

Western Australia observed the highest regional growth at 2.6%, followed closely by the Northern Territory at 2.1% and Victoria at 1.7%.

Tasmania was the sole state reporting a decline, with a 0.5% drop in spending.

Westpac economists noted a rebound in services following their April decline, while goods consumption rose more steadily.

The recent increase in spending comes amidst rising expectations of further monetary tightening by the Reserve Bank of Australia (RBA).

The RBA has raised rates three times in 2026, currently at 4.35% following the May meeting.

Separate data indicated that Australian employment rose by 40,300 jobs in May, lowering the unemployment rate to 4.0%.

Job growth observed

The combination of robust consumer spending and a tight labour market has kept markets anticipating a potential August rate increase.

Continued monitoring of these economic indicators will be crucial as the RBA considers its future monetary policy actions.