‘Underwhelming': Aussies remain cautious spenders
Australians' spending improved marginally in April, but it was not the bump many businesses were hoping for following rate cuts, falling inflation and back-to-back long weekends.
Household spending rose by 0.1 per cent following a 0.1 per cent fall in March and a 0.2 per cent rise in February, Australia Bureau of Statistics figures show.
Much of the spending was on recreational and cultural activities, health and dining out as Aussies took advantage of the long weekends, while spending on clothes, footwear and vehicles fell.
Three of the nine spending categories rose in April, led by hotels, cafes and restaurants, up 2.2 per cent, and health, which lifted 1.6 per cent. Meanwhile, clothing and footwear fell 3.5 per cent.
ABS head of business statistics Robert Ewing called it a steady result.
'Household spending remained steady in April, with a rise in spending on services being partly offset by a fall in goods spending,' he said.
Year-on-year household consumption is up 3.7 per cent, which is effectively flatlining when accounting for population growth.
Thursday's household spending was the latest snapshot of the economy following a weaker than expected GDP figure released on Wednesday showing that Australia slipped back into a per capita recession for the March quarter.
GDP rose in the March quarter by 0.2 per cent and 1.3 per cent year-on-year.
But that anaemic growth was not enough to keep Australia out of a per capita recession, with the nation going backwards by 0.2 per cent per person.
Thursday's household spending data shows a similar story to separate Commonwealth Bank spending figures that show economic activity rose in April on the back of a 'super holiday' period of both Easter and Anzac Day.
But even with the lift, Commonwealth Bank senior economist Belinda Allen told NewsWire at the time that spending in the month remained a 'mixed bag' and was 'underwhelming'.
'I think it's going to take time for the interest rate cuts to really see consumers boost spending further,' she said.
Australians' consumer confidence remained low, Ms Allen said, leading to less economic activity.
'Households are continuing to save at a higher level than you would expect given the improvements in inflation, the income tax cuts and lower interest rates,' she said.
'I think it's pretty evident there's still a bit of caution out there and certainly a lot of the global news wouldn't help either.'
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