Australia's household spending fell 1.2% in April, reversing a fuel-driven surge in March as lower spending on petrol and public transport weighed on transport and recreation spending, according to the Commonwealth Bank of Australia's (ASX:CBA) Household Spending Insights published Thursday.
"The oil shock resulting from the current Middle East conflict has not had the size of impact that was initially expected," CBA Head of Australian Economics Belinda Allen said.
Six of the 12 spending categories fell in April, including rare declines in insurance and health, with health recording its first monthly drop since March last year.
The transport category recorded the largest decline, driven by lower petrol prices following a fuel excise cut and the introduction of free public transport in Victoria and Tasmania.
"Petrol price movements continue to have a big impact on the month-to-month swing in household spending, and we expect households to do much of the heavy lifting over [the] coming months in slowing spending and cooling inflation," Allen added.
Recreation spending fell by 2.6% in seasonally adjusted terms in April, making it the second-weakest category after transport, and it was the only category to record an annual decline in growth over the year.
Annual spending growth slowed to 5.5% in April from an 8.5% surge in March, with utilities leading growth at around 18% after energy rebates ended.
Tasmania recorded a 0.2% rise in spending in April, while South Australia and Victoria were unchanged, and Western Australia, Queensland, New South Wales, and the Australian Capital Territory each declined by 0.2%.