(Bloomberg) -- Australia’s household spending edged down in September, suggesting high interest rates and stubbornly strong inflation are forcing consumers to hunker down.
Spending slid 0.1% from the prior month, figures from the Australian Bureau of Statistics showed on Friday. From a year earlier, it climbed 1.3%.
“Clothing and footwear was the largest factor in the monthly fall, with spending down 1.8%,” said Robert Ewing, ABS head of business statistics. “A 0.6% fall in spending on transport also drove the overall decline.”
Household spending is an important consideration in policy decisions given consumption accounts for more than half of gross domestic product. The Reserve Bank has repeatedly highlighted the outlook for household spending as a key uncertainty after lifting the cash rate to a 12-year high of 4.35% and keeping it there this year.
The RBA meets Tuesday, with economists and markets predicting no change to rates until 2025. The rate-setting board has said it’s still premature to consider cuts.
In seasonally adjusted, current price terms household spending on services rose 0.4% month-on-month, the ABS said.
Friday’s data comes after retail sales figures, which cover goods spending by households, held firm in September following a robust August.
The ABS intends to cease publication of retail sales data from mid-2025, having switched to household spending, which is a more comprehensive report on consumption.
©2024 Bloomberg L.P.