Household spending in Australia declined by 1% in April, indicating economic pressures on consumers.

Annual growth in consumer spending was low at 2.6%, with cutbacks mainly in non-essential sectors such as hospitality and recreation.

Essential goods and services experienced a slight spending increase of 0.5%, despite overall spending slowdown.

Lower-income groups and renters are disproportionately affected by the need to readjust spending habits.

Inflation at 3.6% for the year ending in March is exacerbating the impact on consumer spending patterns.

The Commonwealth Bank forecasts that consumer spending will remain subdued until the end of 2024.

The federal budget aims to alleviate household financial stress through measures like power bill discounts, higher rental assistance, and tax cuts.