Some of the drop is clearly due to more people staying home, unable to spend as businesses shut up shop to stop the spread of the virus.

But staying at home led to electricity spending increasing 9.7 per cent in Victoria and 7.5 per cent in NSW over the quarter. And as more people worked from home, FaceTimed with family and streamed TV, communications spending, including internet costs, jumped 4.4 per cent in Victoria and 3.6 per cent in NSW since the end of 2019.

Spending on hotels, cafes and restaurants dropped about 60 per cent while transport spending plummeted by more than 80 per cent in both states. Clothing and footwear spending was down to levels not seen since the early-2010s.

Uncertainty also played a role, with households appearing less likely to make large purchases, such as a car, and food buying remaining at elevated levels following panic buying earlier in the year.

Victorians spent $6.6 billion on food over the quarter, compared to $6.4 billion in the December 2019 Christmas quarter. But this was down from $6.8 billion in the March quarter. The buying pattern was the same in NSW with a drop in food purchases to $8 billion in the June quarter down from $8.2 billion in the March quarter but up from $7.6 billion at the end of last year.

Nationally, household net savings jumped by $42 billion to $59.5 billion over the June quarter, driven predominantly by the large drop in spending and an increase in social assistance benefits and gross income.

There was a 12.1 per cent fall in household final consumption across the country contributing to a drop in private demand that shaved 7.9 percentage points from GDP.

Treasurer Josh Frydenberg said the slump in spending was a “household consumption story” and the figures reflected both caution from consumers but also the restrictions limiting what can be bought.

Mr Frydenberg said there had been small increases in spending on alcoholic beverages and home furnishings.

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“Recognising that people are staying at home, people are going down to the local store, buying themselves a new computer, new TV and obviously drinking more at home as opposed to a local pub,” he said.

In June, the NSW jobless rate reached 7.2 per cent, compared to 6.8 per cent in Victoria, 8.8 per cent in Queensland and 8.3 per cent in Western Australia.

Callam Pickering, Asia-Pacific economist for job listings site Indeed, said household spending is expected to rebound in the September quarter, though Victoria remains challenged due to extended lockdowns.

“The household savings rate will certainly decline sharply, although we expect it to remain well above pre-crisis levels,” Mr Pickering said.

“Household cautiousness will persist until well into the economic recovery, creating a drag on growth.”

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Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.

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