Australian household spending rises in June as EV sales lift demand

Australian household spending rose 0.8 per cent in June, extending a second straight monthly increase and adding a fresh signal that consumers were still active despite high borrowing costs. The Australian Bureau of Statistics said the gain followed a 1.2 per cent rise in May and a 1.0 per cent fall in April, a run of data that points to a consumer sector that is improving, but unevenly.

The split inside the June number matters. Electric vehicle sales helped drive the rise, with consumers stepping up purchases even as petrol prices stayed elevated. That means the headline improvement was not just about everyday spending, but also about a shift in the timing of big-ticket purchases, where incentives, model availability and fuel costs can quickly pull demand forward.

Tom Lay, the ABS head of business statistics, said discretionary spending rose for a second month at 1.2 per cent, with transport and recreation doing the heavy lifting. That detail suggests households were not retreating across the board, but it also shows where the momentum came from: categories that can swing sharply from month to month, rather than a broad-based surge in all areas of the economy.

For policymakers, the June reading is useful because household spending feeds directly into the outlook for growth and inflation. Stronger spending can keep price pressures sticky and make the Reserve Bank of Australia more cautious about cutting rates, especially if demand is being supported by a mix of wages, savings and strategic spending on vehicles. A weaker print, by contrast, would have added to concern that higher mortgage repayments and living costs were forcing households to pull back.

The data also fit with a consumer landscape that remains fragile but not broken. Westpac IQ put real household spending in the June quarter at 0.7 per cent for the quarter and 2.4 per cent higher than a year earlier, showing that activity has continued to expand even as households absorb previous rate rises. New vehicle sales also remained strong, with the Australian Automotive Dealers Association reporting 140,058 sales in June, up 9.88 per cent from a year earlier, underscoring how much of the month’s strength was tied to transport purchases.

That leaves Australia’s consumer story balanced between resilience and reallocation. Households are still spending, but the June lift suggests part of the strength is coming from targeted big-ticket buying, not an across-the-board return of confidence.