Australian household spending unexpectedly fell in March due to cyclone Alfred

As reported by Bloomberg, Australian household spending unexpectedly dropped by 0.3% in March, snapping a five-month streak of growth. The decline in consumer activity follows the devastating impact of cyclone Alfred, which slammed into the nation’s northeastern region.

The drop in household spending in March completely offset February's gains, according to the Australian Bureau of Statistics, though year-on-year figures rose by 3.5%.

Bloomberg reports that Australian families continue to face intense cost-of-living pressures, though these constraints have helped cool inflation, prompting the Reserve Bank to ease monetary policy in February. The consumer price index is expected to drop again in two weeks, returning to the regulator’s target range.

Despite Australian households carrying heavy debt, they’re being supported by record-high home prices and low unemployment. With consumer spending making up half of Australia’s economy, it remains a key indicator for central bank policymakers.