December Sees Pullback in Household Spending

• Australian household spending contracted 0.4% m/m in December, unwinding the prior month’s strength and undershooting expectations for a modest lift.
• On a year-ended basis, spending remains around 5% higher, broadly in line with the post-pandemic average despite recent monthly volatility.
• Q4 spending volumes increased 0.9%, with gains concentrated in discretionary areas and services, pointing to resilient underlying demand through the quarter.
• While the volume data supports a solid Q4 consumption outcome, the softer December result introduces some downside risk to the RBA’s quarterly consumption assumptions.
• Today’s local calendar includes Westpac consumer confidence at 10:30 and the NAB business survey at 11:30.