June household spending rose 0.8% against a 0.2% consensus forecast, the second straight upside surprise. Discretionary categories led the gain, reinforcing the case for further RBA tightening.
Alpha Score of 37 reflects weak overall profile with moderate momentum, poor value, weak quality. Based on 3 of 4 signals — score is capped at 90 until remaining data ingests.
Australian household spending topped expectations for a second straight month in June, with consumers still opening their wallets for restaurants, recreation gear, and electric vehicles despite three RBA rate hikes so far this year.
The monthly household spending indicator from the Australian Bureau of Statistics rose 0.8% in June to A$81.3 billion. Economists had forecast a much smaller 0.2% gain. The June beat followed an even larger 1.3% jump in May, meaning spending has surprised to the upside two months running.
On a quarterly basis, real spending rose 0.7% in the June quarter to A$227.8 billion, building on a 0.8% increase in the prior quarter. The ABS said the gains were concentrated in discretionary categories: alcoholic beverages and tobacco, recreation and culture, furnishings and household equipment, and hotels, cafes and restaurants. Consumers also spent heavily on electric vehicles, a shift the bureau linked partly to persistently high petrol prices.
The resilience comes as the RBA has raised rates at all three of its 2025 meetings so far, moves aimed at cooling inflation that remains well above the 2-3% target band. Despite the higher borrowing costs, the labour market has held up, giving the central bank room to keep tightening without an immediate spike in unemployment.
Thursday's spending figures suggest those rate hikes have yet to meaningfully slow household appetite for discretionary purchases. The composition of the gain – hospitality, recreation, household goods rather than just necessities – points to underlying consumer confidence that has not cracked under rising debt-servicing costs, several economists said.
For currency markets, the data strengthens the case for further AUD support and keeps upward pressure on short-term rate expectations. The RBA next meets on Aug. 5-6.
The ABS releases the July household spending indicator on Sept. 2.
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