AUSTRALIAN households continued to spend steadily in May, despite ongoing pressure from rising living costs.
New figures from the National Australia Bank (NAB) show total consumer spending increased by 1.1 per cent during the month, recovering from a small decline in April.
Compared to the same time last year, spending was up 6.5 per cent.
The latest NAB Consumer Spend Trend found that spending on non-essential items, known as discretionary spending, increased by 2.4 percent in May.
People spent more money on travel, dining out, hospitality and other services.
At the same time, spending on essential items was mixed.
Fuel spending dropped by 9.1 per cent as petrol prices became cheaper, giving many households some relief.
However, grocery spending continued to rise.
Food retail spending increased by 0.9 per cent during May and was 4.7 per cent higher than a year ago, highlighting the ongoing impact of higher grocery prices.
NAB Head of Australian Economics Gareth Spence said the figures showed consumers were continuing to spend even while facing financial challenges.
“Consumer spending rebounded in May and remains positive over the year, suggesting household demand has been resilient despite ongoing cost pressures,” Mr Spence said.
“The monthly lift was supported by a recovery in discretionary spending, including travel, hospitality and other services.”
Mr Spence said grocery costs were still placing pressure on family budgets.
“At the same time, grocery spending continues to grow at an elevated annual pace, highlighting the pressure essential costs are placing on household budgets,” he said.
He also noted that lower fuel prices had helped consumers during May.
“Overall, consumer spending has [been] somewhat resilient despite weak consumer sentiment and subdued business confidence.”
The data suggests Australian households remain cautious but have not significantly reduced their spending habits despite ongoing cost-of-living pressures.
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