Australians just can’t seem to stop spending. Despite months of warnings about tightening budgets and rising costs, shoppers have once again opened their wallets. From Black Friday deals to concert tickets, it seems the spirit of spending is still alive — and it might be giving the country’s central bank a few headaches.
A Surge in Household Spending
The Australian Bureau of Statistics (ABS) reported that household spending jumped 1% in November, marking the second straight month of growth. Compared to last year, spending is up 6.3%, showing that consumers are far from slowing down.
It’s not just one sector driving the momentum — the growth was broad. Spending on services rose 1.2%, while goods saw an increase of 0.9%. Australians have been particularly enthusiastic about concerts, catering, and recreation, and many took full advantage of Black Friday discounts. Items like clothing, footwear, furniture, and electronics were among the biggest gainers, suggesting that despite the financial squeeze, people are still prioritising comfort and enjoyment.
On an annual basis, spending on services jumped 7.8%, while goods spending climbed 4.9%, reflecting strong demand across both experience-based and retail categories.
The RBA’s Dilemma
The latest figures are good news for retailers but could complicate life for the Reserve Bank of Australia (RBA). The central bank has been hoping to see signs of a cooling economy before making any moves on interest rates. Instead, it’s facing evidence that consumers are still confident — or at least, still spending — even as rates remain high.
During its December meeting, the RBA noted that “capacity constraints and inflationary pressures were building” in the economy, reports Yahoo Finance. With spending remaining this strong, there’s a real possibility the bank might delay any rate cuts in 2026. In other words, the more Australians spend now, the longer it might take for relief to reach borrowers.
Spending, but at What Cost?
The November rise paints a curious picture of Australian households. Many are clearly feeling the cost-of-living crunch, yet spending data suggests people are finding ways to keep enjoying life. Some economists believe this could be a final burst of spending before the pressure of high mortgage repayments and reduced savings begins to bite.
Others argue it’s a cultural shift — after years of restrictions and uncertainty, Australians are spending more freely on experiences, even if it means cutting back elsewhere. But the question now is how long that energy can last. With Christmas spending rolling into early 2026 and household debt at record levels, there’s only so much momentum consumers can sustain before tightening their belts once more.
The Balancing Act
For now, the message is clear: Australians are defying the economic gloom. But that resilience comes with risks. If spending stays strong, inflation may prove sticky — forcing the RBA to hold rates higher for longer. On the other hand, if spending drops sharply in the coming months, the slowdown could hit growth hard.
Either way, November’s figures are a reminder that Australia’s economy — and its people — are as unpredictable as ever.
