Flat August Household Spending Stuns Economists Ahead of RBA Decision

Australian household spending remained flat in August, contrary to economists' expectations. The Australian Bureau of Statistics reported that household spending rose by only 0.0% month-on-month on a current price, seasonally adjusted basis. This is down from the 1.1% jump seen in July.

The annual growth rate slowed to 6.8% from 7.0%. While some categories saw increases, others suffered significant declines. Transport spending rose by 2.3%, hotels, cafes and restaurants by 0.8%, and miscellaneous spending by 0.3%. However, recreation and culture spending fell by 1.4%, while clothing and footwear and alcohol and tobacco each dropped by 1.0%.

The mixed results may have implications for the Reserve Bank of Australia's upcoming decision. The AUD/USD price action has been relatively neutral in recent trading sessions, with moves of around 0.2% over the last two sessions without a clear direction.