National Australia Bank's (NAB) Consumer Stress Index climbed to an 18-month high of 59.6 points in the first quarter of the year from 58.5 points in the fourth quarter of 2024, data showed on April 17.

Three in 10 Australians reported "very high" cost-of-living stress, an indication that inflation remains a concern among consumers despite the recent slowdown.

Government policy stress was unchanged during the quarter following a spike late last year in relation to the upcoming federal election. NAB noted that election results rarely dent consumer spending and that shoppers "react much more strongly to changes in their personal situation than they do to big-picture issues like elections."

Consumers also re-allocated their money to savings from the budget previously earmarked for big-item purchases and vacations.

Fewer consumers see inflation, taxes, and unemployment rising in the next 12 months. Echoing market sentiment, more Australians now expect interest rates to fall.