Friday's flat result follows revised falls of 0.5% in July and 0.1% in June, suggesting households are so far pocketing the indirect savings rather than spending it.
"Growth in household spending has stalled at the start of the financial year, even as the Federal Government's Stage 3 tax cuts came into effect on 1 July," said Robert Ewing, ABS head of business statistics.
On a seasonally adjusted basis, Australians spent nearly $69.73 billion on goods and services last month, down from $70.77 spent in July.
In trend terms, spending fell for the second consecutive month and was down 0.1% through August.
Through the year, household spending was up 1.7%, but given prices rose 2.7% over the same period, this figure is likely lower when adjusted for inflation.
Spending on services rose 0.4% in August, growing for the second month in a row, as Aussies fork out more cash on air travel, hotel accommodation, and dining out.
However, the growth was offset by a 0.3% decline in spending on goods, with the ABS also reporting a 0.3% fall in retail sales of household goods in August.
"Households spent less on new vehicles and automotive fuel," Mr Ewing noted.
Household spending rose in most states and territories compared to the same time last year in calendar-adjusted terms.
Western Australia (up 3.9%) posted the largest increase, followed by Queensland (up 2.7%), and the Northern Territory (up 1.9%).
All these data will feed into the September quarter GDP, with the RBA expecting a gradual pick-up in spending, supported by continued recovery in real income.
However, it won't be until 4 December that the RBA will see whether household consumption in Q3 will bounce back from its 0.2% fall in the June quarter.
Chalmers fails to see expected results
The latest household spending print might not be what Treasurer Jim Chalmers anticipated to see.
As it stands, Aussies have continued to tighten their belts in response to inflationary pressures despite having more money left in their pockets after tax savings and electricity rebates rolled in.
From 1 July, 13.6 million taxpayers have received a tax cut under the stage 3 tax reforms.
However, subdued consumption amid these fiscal relief measures suggests that Australians may be saving all the extra money they get or, more likely, stretching their budgets further due to rising costs.
In the June quarter, Australia's household savings rate remained very low at 0.6%.
This means Australians spent 99.4% of their disposable income during that period.
In annual terms, the saving ratio was 0.9% - the lowest since 2006-07 - with nominal household spending (up 5.9%) outpacing growth in disposable income (up 3.1%).
The InfoChoice State of Aussies' Savings Survey in July found that nearly one in six adult Aussies had less than $1,000 in savings.
What does it mean for inflation?
Low household spending generally leads to reduced inflationary pressures, which is good news for the RBA.
The latest monthly CPI data shows that headline inflation has dropped below the 3%, driven by a record fall in energy prices.
However, despite inflation moderating from its recent peaks, input costs such as wages and materials remain elevated, meaning inflation might remain high even if spending is low.
Underlying inflation, which excludes the subsidy-driven falls in electricity prices, was 3.4% in August, well above the RBA's target range.
September quarter CPI is due on 30 October, less than a week before the RBA Board's next meeting.
Photo by shurkin_son on Freepik
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