Household spending fell sharply in April as the reality of higher living costs crunches household budgets.
For the month of April 2026
🪙 Total spending fell 1.1% MoM
🪙 Annual growth slowed to 4.9% YoY (down from 6.2%)
🪙 Transport fell 4.7% MoM, driven by a sharp drop in air travel
🪙 Discretionary spending fell 0.8%, the largest monthly drop since February 2024
🪙 ABS experimental fuel volume data showed volumes rose 2.0%
There are three interesting takeaways here:
Transport spending was down hard as airlines cancelled routes to keep services viable and the resulting refunds dragged down air transport spending. Households also scaled back travel in response to the broader uncertainty created by the Hormuz crisis.
Fuel volumes went in the wrong direction. With the fuel excise cut depressing prices, people bought more fuel. That's a straightforward price response, but it’s the opposite to the response we really want to see in a supply crisis, where higher prices destroying demand helps balance the market.
Discretionary spending was down a significant 0.8% as household felt the pinch. When things get tight, household are forced to defer or cancel discretionary spending, making this a key indicator of household stress.
For businesses that rely on consumer spending, particularly discretionary spending, a slowdown in spending is the projection that should be shaping your planning. I expect the fuel crisis to get substantially worse before it gets better and combined with the fuel excise cut expiring at the end of the month and higher forecast interest rates, households are going to be under pressure for the rest of 2026.