Household spending rose 0.3% in January 2026, reversing a 0.5% fall in December and following a 1.0% rise in November, according to seasonally adjusted figures released by the Australian Bureau of Statistics (ABS).
In nominal terms, household spending was up 4.6% compared with January 2025.
Tom Lay, ABS head of business statistics, said: "Household spending returned to growth in January, rising in five of the nine spending categories."
Essentials up 0.8% as discretionary spending ticks higher
Spending increased in five of nine categories, with services driving the monthly lift. Services spending rose 1%, supported by Other services, including Digital streaming services and Travel agency and tour services. Health services also contributed, with higher spending on dental services.
The rise was partly offset by weaker goods spending, which fell 0.3%, led by declines in Purchase of motor vehiclesand Recreation and Culture goods.
ABS data showed essential spending rose 0.8% in January, underpinned by health services and spending on motor vehicle repairs and maintenance.
‘Essential spending rose 0.8 per cent and was driven by health services and spending on motor vehicle repairs and maintenance,’ Mr Lay said.
Discretionary spending increased 0.1%, supported by higher spending on Air transport, Personal effects and Recreational and cultural services.
‘Discretionary spending was up 0.1 per cent this month, driven by spending on Air transport, Personal effects and Recreational and cultural services.’
Commenting on the release, Shopify APAC and Japan managing director Shaun Broughton said: "Household spending narrowly returned to growth in January, rising 0.3% on a month-on-month basis. While this is a shallower increase than previous years, suggesting that some consumers are still holding back on spending, the 4.6% year-on-year growth continues to reflect strong economic activity. Following Australia’s GDP growth this week, this will do little to lower expectations of the RBA increasing interest rates in March and more belt-tightening in May’s Budget. With more regulatory changes on the horizon, retailers will be well-served by staying nimble - through adjusting inventory, optimising marketing strategies, and maintaining seamless online experiences - to navigate fluctuations in demand."