Australians increase spending for fifth quarter

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Australians are spending more for the fifth quarter in a row, but the boost isn’t coming from shopping sprees — it’s from everyday essentials.

The Australian Bureau of Statistics (ABS) says household spending rose 0.2% in September, following a flat August and a 0.4% lift in July. Overall, spending is up 5.1% over the past year, outpacing inflation at 2.7%.

But the gains aren’t as good as they sound. Most of the growth came from food, fuel, and healthcare, which jumped 1.8% in September, said ABS head of business statistics Tom Lay.

Economists warn this shows families are stretching their budgets to cover rising costs, while cutting back elsewhere.

Spending on recreation, travel, and accommodation was flat or falling, as households focused on must-haves rather than nice-to-haves.

“This shift from discretionary to essential spending is concerning — it’s much harder to cut back on the basics,” said Harry Murphy Cruise from Oxford Economics.

Even so, he noted that overall spending remained “fairly solid,” suggesting households still have an appetite to spend — one reason the Reserve Bank is expected to keep interest rates steady.

Interestingly, a drop in alcohol and tobacco sales may be misleading the numbers. The ABS says a rise in black-market tobacco has dragged official spending figures down.

Adjusting for that, actual household spending rose 0.4% for the quarter — twice the reported rate.

More updates to come on AusNewsLanka.