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Interest rates, inflation: Household spending is falling again ahead of the RBA’s decision


Household spending is higher than in the same period last year, but growth has slowed significantly since late 2022.

New ABS data from Tuesday showed that a six percent growth rate in April continued the trend after a peak of 29.1 percent in August.

Kate Lamb, Head of Business Indicators at ABS, said the downward trend was driven by lower growth in spending on consumer services “such as leisure travel or eating out, which continues to normalize following the Covid-19 pandemic”.

The figures show that the highest spending growth for the month was transportation, up 15.5 percent, but still significantly lower compared to August’s peak of 63.5 percent.

“Growth in spending on goods has also slowed, but to a lesser extent, as inflation continues to push up spending on food,” said Ms Lamb.

The numbers were released just hours before the Reserve Bank made its decision to raise or pause interest rates.

Meanwhile, the ABS has revealed that the number of total homes approved fell 8.1 percent in April.

Private sector homes fell 3.8 percent, while all other private sector homes fell 16.5 percent.

The figures show that the value of new homes fell by 2.7 percent, while the value of non-residential buildings rose by 13.5 percent and the total value of buildings increased by 4.7 percent.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.