Households unexpectedly lifted spending on travel, restaurants and takeaway meals in May, creating further confusion on the state of the economy.
Australian Bureau of Statistics figures, released today, said hotel cafe and restaurants spending was up 1.9 percent and clothing and footwear by 2.7 percent.
“The rise in spending at hotels, cafes and restaurants was driven primarily by catering services, including restaurant meals, takeaway and dining out,” ABS head of business statistics Tom Lay said.
“Demand was also likely supported by sporting and cultural events across Australia, alongside higher catering and hospitality prices.”
The clothing spike, and the fall the previous month, was impact by discounting across mid-season clearance, stocktake and early end-of-financial year sales events offered by retailers.
The figures add to the confused signals coming from the economy. Inflation is down slightly at 4 percent but well out of the 2-3 percent target range set by the Reserve Bank.
These latest figures run contrary to other indicators suggesting discretionary spending is starting to fall off the back of multiple interest rates rises.
The Reserve may still consider the data too patchy to make a call on further rate increases.
Overall, household spending rose 1.3 percent in May 2026 in seasonally adjusted terms.
This followed a fall of 1.1 percent in April and a rise of 1.7 percent in March.
“The rise in household spending largely reversed what was seen in April, reflecting a lift across all nine spending categories,” Mr Lay said.
“Annual household spending increased by 5.5 percent compared to May 2025, up from the 5.1 percent annual rise in April.”
Transport spending rose by 1.4 percent in May after falling 4.7 percent in April, with these figures mostly reflecting the distortion of travel refunds from the Middle East conflict.
“Excluding air transport spending, which was impacted by travel related refunds, total household spending would have risen 0.6 percent.” Mr Lay said.
Fuel spending remained elevated but is gradually easing from the peak observed in March.
A 1.1 percent rise in food spending also contributed to the May result, reversing an April fall due to higher grocery prices.
The full report is here.
