US Markets
Australian Household Spending Falls 1.1% in April Amid Travel Pullback
Household spending in Australia dropped in April as people scaled back on travel amid the Middle East crisis.Spending fell 1.1%, representing a downturn from the 1.6% rise recorded in March, according to data published by the Australian Bureau of Statistics (ABS) on Thursday.The decline was steeper than the market's estimate of a 0.5% drop, but smaller than the 1.3% and 1.4% decreases forecasted by ANZ and the Commonwealth Bank, respectively.The downturn was largely attributed to a 4.7% drop in transport spending, with air travel being the biggest contributor. Consumers reduced their travel due to uncertainties surrounding the conflict in Iran, which drove up airfares and jet fuel costs.However, fuel spending eased compared with March after the Federal Government halved the fuel excise duty, a measure that took effect on April 1."The fuel excise discount provided some immediate relief to household budgets. We also saw spending on public transport ease in states offering free travel, particularly Victoria and Tasmania," ABS head of business statistics Tom Lay said.The ABS noted that "a rise in new vehicle sales provided a partial offset to the broader transport decline.""Our broader view remains that consumers have been broadly resilient to the fuel shock and rising interest rates so far, but there are emerging signs of softness," Commonwealth Bank economist Harry Ottley said in a note."The weakness in spending - we estimate the ex-fuel spend over the past six months to be only around 1% higher - does sit reasonably consistently with the weakness in consumer confidence, the low level of auction clearance rates and slightly better than expected inflation data for April. The latter suggests that firms might be struggling to pass price and cost increases through to consumers," Adam Boyton, ANZ's head of Australian economics, said in a separate note.Spending on other commodities also fell, with food and apparel dipping 1.3% and 2.2%, respectively, according to the ABS. Meanwhile, spending on services increased, with health, as well as hotels, cafes, and restaurants, each rising by 0.5%.
ASX 200
