Household consumption growth stable but income growth remains low: RBA
Households are spending more money despite growth in household income remaining low, the RBA's November domestics economic conditions report suggests.
Household consumption growth has been stable at around three percent over the last year, however growth in household income remains low.
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Goods consumption grew by 3.5 per cent over the year to the June quarter.
The strong percentage growth in expenditure on food and clothing more than offset a decline in motor vehicle sales.
Consumption of services grew by 2.6 per cent, supported by growth in the consumption of recreation and communication services.
There have been some sizeable upward revisions to consumption growth in recent quarters, notably to consumption of overseas travel services, which has become more complicated to measure after the discontinuation of outgoing passenger cards in mid 2017.
By state, consumption growth continues to be strongest in New South Wales and Victoria.
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Disposable income growth has been driven by labour income, which is growing at around its fastest year-ended rate since 2012.
It is still tracking however below its long-run average.
"Housing and equity prices will weigh on household wealth," the RBA noted.
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