Overall household spending across Australia has seen more consistent growth this year since March compared to patterns seen in 2023 and 2024.
This is according to CommBank’s Household Spending Insights (HSI) covering October 2025, which shows that its HSI index has grown by 0.6 per cent in October compared to the prior month, matching a similar lift in September and marking the thirteenth straight month of growth.
Eleven of the twelve categories recorded a gain month-on-month, including household goods which lifted 0.6 per cent. Year-on-year, household goods spending is up 5.2 per cent, which CommBank stronger growth in online marketplaces, men’s and women’s clothing stores, discount department stores and hardware stores.
These growths were offset by falls in online deals, tobacconists, gifts, cards and novelty stores. Fashion accessories and floor covering retailing also declined.
The strongest month-on-month lift was recorded in transport, rising 1.2 per cent. In year-on-year terms, utilities led the charge up 13.8 per cent. Utilities spending was the only one to decline in month-on-month terms, down 0.8 per cent.
But CommBank shared that while household spending appears better, inflation is likely distorting the picture.
“The recent strength in spending is likely being driven partially by price increases rather than purely higher consumption volumes,” CBA head of Australian economics Belinda Allen said.
“That’s important because it complicates how we interpret household resilience and how the Reserve Bank of Australia reads the economy as it weighs future interest rate decisions.”
Categories seeing the sharpest annual gains – utilities (up 13.8 per cent), communications and digital (up 10.1 per cent), and hospitality (up 9.1 per cent) – are also among those most affected by inflation and the scaling back of government support on energy costs.
CommBank reported that changes to energy rebates have boosted utility spending over the year, while higher prices and evolving consumer habits are driving growth in digital categories, such as streaming services, online gaming, and mobile data.
“While these patterns suggest households are adjusting to inflation by prioritising essential and at-home entertainment spending, hospitality has also witnessed strong spending growth driven by food delivery and eating out,” CommBank noted.
Spending growth has varied across regions, as Queensland (up 7.9 per cent) and Western Australia (up 7.5 per cent) posted the strongest annual gains, while Tasmania has seen the weakest growth at up 3.1 per cent.
Despite steady spending, inflation and interest rate uncertainty remain major headwinds for the outlook for household spending.
CBA economists forecast that there will be no further rate cuts in this cycle, and the cash rate will be held at 3.60 per cent. They warn that consumers could soon rein in discretionary spending if real income growth fails to keep up with prices and savings ratios are wanted to be maintained.
“Household resilience has been remarkable,” Allen said. “But sustained inflationary pressure could impact consumer choices going forward.”