Cautious Spending Persists Despite Economic Stimuli

0

This slight rise was primarily fueled by increased spending on recreational, cultural, and dining activities, taking advantage of the holiday period. However, expenditures on clothing, footwear, and vehicles experienced notable declines. Highlights from the ABS report reveal that spending in the hospitality sector, including hotels, cafes, and restaurants, surged by 2.2%, while health-related spending rose by 1.6%. In contrast, the clothing and footwear category saw a substantial 3.5% drop.

According to Robert Ewing, head of business statistics at ABS, household spending maintained stability, with service-based spending balanced by a dip in the consumption of goods. Furthermore, year-on-year household consumption shows a 3.7% increase, which is relatively stagnant when adjusted for population growth.

This spending data comes in the wake of a weaker-than-anticipated GDP figure for the March quarter, indicating a per capita economic recession. Despite a 0.2% increase in GDP for the quarter and a 1.3% year-on-year rise, these growth rates failed to avert the recession, with the country's per capita GDP slipping by 0.2%.

The trends in household spending align with separate indicators from the Commonwealth Bank, which reported heightened economic activity in April during the "super holiday" period encompassing Easter and Anzac Day. Nevertheless, Commonwealth Bank senior economist Belinda Allen described the spending surge as "underwhelming" and a mixed result, highlighting persistent consumer caution even amidst interest rate cuts, tax relief, and improving inflation.

Consumer confidence remains subdued, as Allen notes a propensity for Australians to prioritise saving, despite economic incentives. Ongoing global uncertainties may contribute to this cautious financial approach, suggesting a continued conservative mindset among consumers.

Published:Friday, 6th Jun 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

Westpac Faces Renewed Scrutiny Amid RAMS Loan Misconduct 06 Jun 2025: Paige Estritori Australia's financial sector is yet again under the spotlight as Westpac finds itself embroiled in another scandal involving irresponsible lending practices. The bank's RAMS home loans subsidiary faces serious allegations by the Australian Securities and Investments Commission (ASIC) regarding improper loan approvals. - read more

Cautious Spending Persists Despite Economic Stimuli 06 Jun 2025: Paige Estritori Australians continue to exhibit cautious spending behaviours, as evidenced by a modest uptick in expenditure during April, notwithstanding consecutive long weekends and favourable economic conditions. Recent data from the Australian Bureau of Statistics (ABS) illustrates a 0.1% increase in household spending, following declines and tepid growth in the preceding months. - read more

The Star Casino Faces AUSTRAC Penalties Over Money Laundering Breaches 06 Jun 2025: Paige Estritori The Star Casino is embroiled in legal difficulties after allegations emerged in a Federal Court involving their facilitation of risky financial transactions, including offering massive gambling credits to individuals known for money laundering. This follows financial watchdog AUSTRAC's pursuit of legal action against the casino. - read more