Australia’s Household Spending Exceeds Forecasts in June, Bolstering RBA Tightening Case

• Australian household spending rose 0.8% in June, beating forecasts.
• Discretionary spending, including EV sales, drove the increase.
• Data strengthens case for RBA to consider further tightening.

Australian household spending increased by 0.8% month-on-month in June, significantly exceeding the consensus forecast of 0.2% and following a 1.2% rise in May. This robust growth was primarily driven by discretionary categories, including hospitality, recreation, household goods, and a notable surge in transport spending, which more than doubled to 3.0% partly due to new electric vehicle sales. The stronger-than-anticipated consumer demand suggests resilience despite the Reserve Bank of Australia’s (RBA) three interest rate hikes earlier this year. This data point could reinforce arguments for the RBA to consider further monetary tightening, potentially challenging expectations for an unchanged policy decision at its upcoming meeting.