Australian household spending rises 1.3% in May

• Australian household spending increased by 1.3% in May, reversing a 1.1% fall in the previous month.
• The recovery was driven by a lift across all nine spending categories, bringing the annual spending increase to 5.5%.
• The rise reflected a return to normal travel refunds alongside increased spending on dining out and retail sales discounting.

Australian household spending rose by 1.3% in May, according to the Australian Bureau of Statistics.

The monthly turnaround follows a revised 1.1% decline in April and a 1.7% increase in March.

"The rise in household spending largely reversed what was seen in April, reflecting a lift across all nine spending categories," said ABS head of business statistics Tom Lay.

Transport spending grew by 1.4% as travel refunds normalised after flight cancellations caused by the Middle East conflict elevated April figures.

Discretionary spending drove the broader gains, with clothing and footwear up 2.7% and hospitality up 1.9%.

Following the announcement, the Australian retail sector index was up 0.4% to 7,420 points.

Fuel spending volumes fell 0.4% during the month as the impact of the halved fuel excise duty continued to pass through to consumers.

Food spending also contributed to the positive monthly result by rising 1.1% to reverse an April drop caused by higher grocery prices.