Australian consumer spending growth slowed in January, indicating less momentum than expected at the start of the year, according to Global X ETFs senior product and investment strategist Marc Jocum. Total spending rose 0.3 per cent over the quarter, below the 0.4 per cent consensus, and 4.6 per cent year-on-year versus 5.1 per cent expected, which highlights a moderation in discretionary purchases. Global X ETFs offers investors access to a range of thematic and core equity, fixed income, and commodity-linked investment solutions. The company aims to provide tailored investment opportunities across global markets.
Jocum noted that households are prioritising essential spending while scaling back on discretionary purchases. This aligns with a more deliberate approach to spending as interest costs remain elevated and real incomes face pressure. The data follows GDP growth of 2.6 per cent over the past year, which reveals solid aggregate growth but a slowing consumer pulse.
The weaker spending data may give the Reserve Bank of Australia (RBA) slightly more flexibility, but inflation risks persist. Markets will remain focused on upcoming CPI data and the RBA’s policy path. Shopify APAC managing director Shaun Broughton said the data would likely reinforce expectations of a potential interest rate increase by the RBA in March, along with further belt-tightening measures in the May Budget. Shopify provides e-commerce solutions to businesses of all sizes.
Broughton advised retailers to remain adaptable by adjusting inventory, optimising marketing strategies, and maintaining seamless online experiences to navigate demand fluctuations. This is particularly important with more regulatory changes anticipated, which will require retailers to stay nimble to succeed in the market.
