Spending growth concentrated on essentials as transport costs surge
Australian household spending remained resilient in the weeks leading up to ANZAC Day despite the ongoing Middle East conflict, though signs of softness are emerging in travel and discretionary categories, according to a new report by the Commonwealth Bank of Australia (CBA).
The Economic Insights report, published Monday by CBA senior economist Ashwin Clarke, tracked the impact of the Middle East conflict on the Australian economy using the bank’s high-frequency spending and income data for the week ending 25 April 2026.
Total spending in the first four weeks of April 2026 grew 6.7% compared with the same period in 2025, with growth recorded across all states and territories. Western Australia recorded the highest growth at roughly 7.7%, while the ACT posted the lowest at around 5.4%.
By category, spending growth was concentrated on essentials. Transport, boosted by elevated petrol prices, as well as health and utilities, led the gains.
Discretionary spending was relatively weaker, with travel recording the steepest decline. Accommodation spending over the first four weeks of April also came in below 2025 levels, which the report attributed to more households staying home over the Easter long weekend and April school holidays.
Spending at pubs and bars was notably subdued during the ANZAC Day week, a departure from the usual spike seen on the public holiday. The report noted the trend was consistent across all states and territories.
Retail spending was slightly soft in the week to 25 April, partly attributed to seasonal factors, as many shops closed on ANZAC Day. Spending on durable goods, particularly at electronics stores and homewares and appliance retailers, was also weak.
On the fuel front, diesel prices remained elevated at 254 c/L, about 37% above the 2025 average, while petrol prices were roughly in line with their 2025 average at 183 c/L. Both petrol and diesel prices continued to decline in the week to 3 May.
In the housing market, Cotality daily data showed a divergence across capital cities, with Sydney and Melbourne recording price falls, while other capitals showed slower but still positive growth. Auction clearance rates in 2026 tracked well below levels seen at the same point in 2024 and 2025.
The report noted that medium-term inflation expectations, particularly inflation swaps, remained elevated and continued to edge upwards, with the Reserve Bank of Australia watching the data closely.
Weekly salary transaction data showed income growth had stepped down following a tax cut-driven bounce from 1 July 2025, though it remained resilient and was consistent with March labour force data showing the labour market on solid footing.
The report cautioned that a softening in spending growth is expected by both CBA and the RBA over 2026 and would help bring inflation back to target, adding that there is no sign that the recent sharp pullback in consumer sentiment has materially changed household spending decisions.
