Household spending shows no signs of slowing down, rising 18.4% in July

The new ABS data shows household spending across Australia has risen 18.4% in July 2022, compared to the same time last year. 

Jacqui Vitas, head of macroeconomic statistics at the ABS, said July saw the 17th consecutive month of through-the-year increases in total household spending, with increases in all spending categories. 

"There were particularly strong increases in spending on clothing and footwear (up 45.0%), transport (up 35.4%) and hotels, cafes and restaurants (up 34.9%)," Ms Vitas said.

"These increases were coming off the back of the COVID-19 Delta lockdown impacts that we saw last year, when there was reduced spending in these spending categories due to lockdowns."

Several spending categories weren't impacted by 2021 lockdowns, such as food (up 2.0%), alcoholic beverages and tobacco (up 1.2%) and furnishings and household equipment (up 0.8%), and as a result saw only moderate rises. 

CBA head of Australian economics Gareth Aird said there is generally a three-month lag time between interest rate rises and when consumers start to feel the impacts.

"(This) largely explains why the official spending data has remained strong but consumer sentiment sits at levels associated with a recession," Mr Aird said.

How does spending compare to pre-pandemic times?

The ABS estimates that total household spending in July 2019 was 11.9% higher in current price, with the strongest increases over this period being furnishings and household equipment (up 22.4%), clothing and footwear (up 22.3%) and recreation and culture (up 21.6%).

Household spending in July 2022 rose across all states and territories, compared to the same time last year.

The highest increases in spending throughout the year were recorded across New South Wales (up 33.2%) and South Australia (up 23.3%), both states were experiencing lockdowns this time last year due to the Delta wave. 

All states showed an increase in household spending compared to pre-pandemic July 2019 estimates, with Queensland showing the strongest rise (up 19.1%), followed by South Australia (up 16.9%) and Tasmania (up 16.4%).

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