SYDNEY: Australia’s household spending rebounded in January, signalling resilient consumer demand even as the outlook is clouded by the risk of further interest-rate hikes and higher energy costs stemming from the escalating Middle East conflict.
Consumption rose 0.3% from the prior month, just missing economists’ predictions for a 0.4% gain, according to data from the Australian Bureau of Statistics (ABS) yesterday.
The result followed an unexpected decline in December and left spending up 4.6% from a year ago, also below estimates.
“Household spending returned to growth in January, rising in five of the nine spending categories,” said Tom Lay, head of business statistics at the ABS. Spending on services drove the rise, he added.
The numbers provide a snapshot of the consumers and come at a critical juncture for the central bank which has warned that a rate hike this month is a “live” possibility.
The household savings ratio climbed to its highest level since the third quarter of 2022, suggesting some caution among consumers. — Bloomberg
