Australian household spending stalls in August as fuel costs rise

Australian household spending held steady in August, with consumers pulling back on food, clothing and cultural activities while spending more at the fuel pump, official data released on Tuesday showed.

The Australian Bureau of Statistics' monthly household spending indicator came in unchanged for the month at A$82.3 billion, equivalent to about $57.71 billion. The reading fell short of market expectations of a roughly 0.3% increase, which had followed an unexpectedly strong 1.1% gain in July.

Despite the flat monthly outcome, spending continued to grow at a solid pace over the year, rising 6.8%. That resilience in consumption has persisted even as borrowing costs have climbed.

The strength of household demand is among the factors behind expectations that the Reserve Bank of Australia will lift interest rates for a fourth time this year at its meeting later on Tuesday.

Within the August figures, the pullback was broad-based across several discretionary and everyday categories, including food, clothing and culture. Fuel was the notable exception, with households directing more of their budgets toward it during the month.