Household spending was down 0.4% in December in nominal terms, according to the latest data from the Australian Bureau of Statistics (ABS). Spending eased month-on-month for the first time in several months. However, spending remains higher compared to a year ago.

Spending was mixed across states, decreasing in four of eight states led by Victoria (-1%), NSW (-0.6%) and ACT (-0.4%). Across categories, spending eased in December except for hotels, cafes and restaurant spending, which rose 0.5% for the month, while the food spend declined

–0.4%.

Despite decreases in the monthly numbers, spending on both services and goods rose in the year to December. The latest increase in the official cash rate is expected to impact mortgage holders, but strength in other economic indicators is likely to continue supporting near-term household consumption. According to UBS commentary, cost-of-living pressures aren’t worsening, but they aren’t easing, either. This is prompting consumers to adjust spending on food, trading down to private label and promotions.