Consumers have money to burn

Consumer spending was up by only 0.6 per cent in the June quarter, but this followed growth of more than 1 per cent in the December and March quarters, contributing to an annual increase of 3.9 per cent. Nominal disposable income for the year to June rose by 7.5 per cent, in line with an increase of 5 per cent in average wages and a 2 per cent employment increase. Consumer spending makes up around 60 per cent of the Australian economy which, if it grows too fast, can easily place more pressure on the Reserve Bank to lift interest rates.