Household spending falls in July
Household spending was 0.7 per cent lower when compared to July last year, according to figures released today by the Australian Bureau of Statistics (ABS).
Robert Ewing, ABS head of business statistics, said households have curbed their spending over the past 12 months amid higher interest rates and inflation.
“This is the first time since February 2021 that the spending indicator has fallen.
“Spending on discretionary goods and services was down for the fourth straight month. It fell 3.3 per cent over the year, as households adapt to cost of living pressures.
“Non-discretionary spending rose 1.7 per cent, which is the lowest growth rate since early 2021.”
Goods spending saw its largest decline since July 2021 with a 4.1 per cent fall, while spending on Services rose 2.4 per cent.
The overall fall in household spending compared to July last year was driven by Furnishings and household equipment (-7.9 per cent), Clothing and footwear (-7.5 per cent), and Recreation and culture (-3.9 per cent).
Household spending fell in four states and territories in July 2023 compared to July 2022, and rose in the other four.
The Northern Territory recorded the largest drop in spending (-6.7 per cent), led by falls for Clothing and footwear (-23.0 per cent) and Recreation and culture (-15.5 per cent).
When comparing this month to last month, spending growth rates were lower in all states and territories. The NT also had the largest slowdown in spending compared to the same time last year, dropping from -0.7 per cent in June to -6.7 per cent in July.
- The indicator is produced using aggregated and de-identified card and bank transactions from banking and financial institutions.
- The indicator includes nine of the 13 key divisions classified, according to the Classification of Individual Consumption by Purpose (COICOP).
- All modes of transport are classified as non-discretionary, including bus, train and air fares, and the purchase and operation of motor vehicles.
- The indicator is produced in current price original and current price calendar adjusted terms only.
- Until the indicator is seasonally adjusted, it is advised to focus on through-the-year comparisons (e.g. July 2023 compared to July 2022).
- Significant events such as COVID-19 can lead to very strong through-the-year rises. Care should be given when comparing periods with these events.
- Care should be given when comparing Household Spending Indicator estimates with other ABS products. See the Methodology page for further information.
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