By Stella Qiu
SYDNEY, Jan 12 (Reuters) - Australian household spending growth was solid for a second month in November as consumers splashed out on Black Friday sales, concerts and sporting fixtures, data showed on Monday, another sign the economy was gathering steam.
The results for October and November point to a strong fourth quarter for consumer spending, which is likely to add to the case for a resumption of interest rate hikes given the economy is already hitting speed bumps.
Data from the Australian
Bureau of Statistics showed its monthly household spending indicator (MHSI) rose 1.0% in November to A$79.4 billion ($53.17 billion), on top of a revised jump of 1.4% the previous month.
The annual pace of spending growth picked up to 6.3%, the highest level since September 2023, from 5.7%.
"The undeniable strength in household consumption will likely set the alarm bells off for the RBA," said Abhijit Surya, senior APAC economist at Capital Economics.
"The fact that growth was driven to a greater extent by services spending suggests that there is in fact solid momentum behind the consumption rally," he added.
Spending on goods climbed 0.9% with clothing, footwear, furnishings and electronics seeing the biggest gains as consumers took advantage of discounts. Spending on services rose 1.2% driven by major events, including concerts and sporting fixtures.
The Reserve Bank of Australia cut interest rates three times last year to 3.6% but has warned the next move could be up rather than down because inflation has accelerated.
Headline inflation ran at an annual 3.4% in November, while the core measure slowed to 3.2%. Both were above the central bank's target band of 2% to 3%.
Swaps imply a 25% chance of a rate hike in February, while a move in May is about 76% priced in. For all of 2026, a total tightening of about 30 basis points is expected.
($1 = 1.4934 Australian dollars)
(Reporting by Stella Qiu and Wayne Cole; Editing by Jamie Freed)
