Australia Macro Service > Australia Research Briefings

Strong employment and lower saving underpin spending

Strong employment growth and a trend decline in the household saving rate have supported household consumption in recent years, overcoming sluggish income growth. However, looking forward we expect employment growth to moderate and the saving rate cannot fall too much further. And with income growth set to remain sluggish, as a result of subdued wage increases, low interest rates and stagnant dwelling rents, we expect momentum in consumer spending to moderate.

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