The CommBank Household Spending Intentions Index rose by 1.05% in July to 114.8.
This comes as inflation hit an annualised rate of 6.1% - the highest in 32 years.
CommBank data shows the gain in July was driven by higher spending on entertainment, transport, retail, and utilities services sectors.
The entertainment category in particular was up a strong 9% in July 2022 and up 24.5% on July 2021, with school holiday activities likely driving the growth.
Aussies were pulling out their wallets and spending more on eating out and restaurants, drinking places (bars, clubs, pubs), live theatres, movie theatres, bowling alleys, aquariums, and pool establishments.
It must be noted that July last year was impacted by the Delta lockdowns in NSW and Victoria.
In contrast, home buying, travel, health and fitness, education, and household services all recorded declines in July.
| Spending Category | Monthly Change % | Yearly change % |
| Entertainment | +9.0% | +24.5% |
| Transport | +6.0% | +146.4% |
| Retail | +5.2% | +14.7% |
| Utilities | +1.0% | +1.3% |
| Motor Vehicle | +0.1% | -21.0% |
| Communications and Digital Streaming | -0.1% | +0.6% |
| Insurance Costs | -0.2% | +1.7% |
| Household Services | -0.8% | +19.8% |
| Health and Fitness | -1.5% | -0.3% |
| Education | -1.6% | +6.8% |
| Travel | -2.1% | +84.6% |
| Home Buying | -7.3% | -26.4% |
Source: CBA
Off the back of the recent RBA rate hikes, the number of home loan applications was lower in July relative to both June 2022 and July 2021.
The home buying spending intentions index was down a further 7.3% in July, with declines expected to continue.
“While consumer spending remains higher than a year ago when much of Australia’s East Coast was in lockdowns, we’re also seeing a moderation in spending growth in interest rate sensitive sectors,” said Stephen Halmarick, CBA chief economist.
“We can expect consumer spending will slow further over the coming months as higher interest rates feed through into household budgets and as the Reserve Bank of Australia increases the cash rate further in pursuit of its goal to curb inflation.”