October 2022 recorded a 20.7% increase in household spending compared to October 2021, but this is not as large a difference as September (28%) and August (29%).

The ABS recommends focusing on these year by year changes to track household spending, as month to month differences are affected by seasonal variability at the moment.

ABS head of macroeconomic statistics Jacqui Vitas said that COVID-19 continued to be the biggest factor influencing the numbers.

“The through-the-year rise was more moderate than previous months, which coincides with less COVID-19 Delta lockdown impacts this time last year,” Ms Vitas said.

“Spending in Transport (up 42.3%), Hotels, cafes and restaurants (up 39.9%), and Clothing and footwear (up 32.2%) all saw strong increases but have slowed in comparison to the previous two months.

“In contrast, spending categories not as negatively impacted by the lockdowns - Food (up 4.5%) and Furnishings and household equipment (up 1.8%) - saw only small rises compared with October 2021.”

Discretionary household spending rose 20.4%, driven by spending in recreation, culture, clothing and footwear.

Non discretionary household spending was up 21%, predominantly driven by demand for transport services gradually returning to pre pandemic levels.

By the same metric, all states and territories saw increased household spending in October 2022 compared to 2021. 

The biggest rises came in Victoria (32.8%) and the ACT (36.6%), which had stricter COVID protocols at the same time last year.

In New South Wales for example, where COVID restrictions were much more relaxed by October 2021, only increased by 16.5% compared to a 38.2% increase from September 2021 to September 2022,

However, this reduction in growth may also be indicative of the expected decline in spending as people respond to the cash rate hikes.

Typically, there tends to be about a three-month lag between interest rates rising and consumers feeling the impact, according to CBA head of Australian economics Gareth Aird.

The RBA today announced another 25 basis point increase, bringing the cash rate to 3.1% - a 10-year high.

Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Rates
Features
Fees
Other
Lender
VariableMore details
Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
Online ExclusiveUp To $4K Cashback

loans.com.au – Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
More details
VariableMore details
Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Apply In Minutes

Unloan – Variable Rate Home Loan LVR < 80%

  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
More details
VariableMore details

loans.com.au – Solar Home Loan (Principal & Interest) (LVR < 90%)

    More details
    Important Information and Comparison Rate Warning

    Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 6, 2024. View disclaimer.

    Picture by Melissa Walker Horn on Unsplash