-- Australia's household spending rose 2.9% in March, after a 0.4% fall in February, as transport spending surged 22.9%, according to the Commonwealth Bank of Australia's Household Spending Insights published Thursday.
Household spending was up 1%, even excluding transport costs, which were inflated by higher fuel prices, with all 12 categories recording monthly increases, the report added.
"As expected, the sharp March lift in household spending reflects higher petrol prices as a result of the conflict in the Middle East," CBA Head of Australian Economics Belinda Allen said.
The bank expects household spending to slow as real household disposable income growth weakens, easing inflation pressures over time, with the outlook for consumers critical to the movement of interest rates beyond May.
Hospitality spending increased 1.2%, and recreation rose 0.9% over the month. Utilities spending rose 6.9% while spending on insurance climbed 2.5%.
The bank said that while higher fuel prices initially lifted spending, regional areas are more exposed to prolonged increases given the heavy reliance of agricultural, mining, and freight industries on diesel-intensive operations.
Allen added that regional spending is likely to soften if elevated fuel prices persist.