Australian Household Spending Sees Solid Gain in June, Driven by Electric Vehicle Sales

Australian household spending posted a solid gain in June, driven by increased demand for electric vehicles amid high petrol prices. The data from the Australian Bureau of Statistics (ABS) showed that the monthly household spending indicator (MHSI) rose 0.8% to A$81.3 billion, exceeding analysts' expectations.

The annual pace of spending growth picked up to 6%, hitting a three-month high. New vehicle sales were the standout in transport, driving a 3% rise. Electric vehicle sales increased significantly over the year and continued their trend in June, accounting for a growing share of overall new vehicle sales.

The Reserve Bank of Australia has raised interest rates three times this year to 4.35%, which is cooling the housing market and driving down prices. However, this may not necessarily curb consumer spending through the wealth effect, as consumers are adjusting their behavior in response to rising fuel prices.