The CommBank Household Spending Insights (HSI) Index has lifted ever so slightly for the month of June, thanks to increased spending on recreation (+3.2 per cent) and hospitality (+2.1 per cent), however there is a growing disparity in spending habits between renters and home owners.

CBA Chief Economist Stephen Halmarick noted, "While it was somewhat surprising to see household spending rise for the second month in a row, we have witnessed a significant disparity in spending behaviours across home ownership categories, as renters pull back on spending in the year to June while mortgage holders and outright owners have increased spending."

Spending on essentials such as Insurance (+8.8 per cent), Utilities (+6.8 per cent) and Transport (+5.7 per cent) saw the biggest jumps in the year to June. Renters' spending declined 0.9 per cent in the year to June compared with spending increases for those with a mortgage (+1.5 per cent) and outright owners (+2.1 per cent).

"This suggests younger Australians, who are more likely to be renting, are tightening their wallets and likely spending more on essentials, given these are the fastest growing spending categories so far this year," Halmarick said.

Overall the HSI Index rose 0.6 per cent to 150.51, with online travel bookings, fitness clubs and gyms, and sporting goods stores were among the contributors to the increase in Recreation spend for the month. However, on an annual basis, Recreation spending growth was just 0.2 per cent. Hospitality, on the other hand, saw a year-on-year increase of 3.8 per cent, with pubs, taverns, bars and food delivery services being the biggest drivers of this month’s spending increase.

The ACT recorded the strongest growth in spending (+1.5 per cent), followed by NSW and SA, both recording a growth of 0.7 per cent. WA (+0.6 per cent), Victoria (+0.5 per cent), Queensland (+0.4 per cent) and Tasmania (+0.3 per cent) all recorded more modest growth.

"Looking ahead, the Household Spending Insights will be an early indicator of the impact of the income tax cuts and electricity rebates that began on 1 July. Our base case remains for the next move from the RBA to be easing of monetary policy, however this view will be dependent on upcoming employment and inflation data," Halmarick said.

The CommBank HSI index is based on de-identified payment data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions.