News: CBA Australia Jan household spending rises on travel and fitness, CBA data shows

SYDNEY, Feb 15 (Reuters) - Australia's household spending rose in January after a sharp drop the previous month, with consumers spending more on travel and fitness in the new year, data from the Commonwealth Bank of Australia showed on Thursday.

The CommBank Household Spending Insights (HSI) index rose 3.1% to 141.9 in January from December but the gain did not fully offset a sharp drop of 3.5% the previous month. The annual rate of increase remained unchanged at 3.6%.

Recreational expenditures jumped 13.5%, driven by spending on airlines, fitness clubs and travel agencies. Spending on household goods also bounced 10.5% after falling 15% the month before.

CBA expects a further slowdown in the pace of household spending in the first half of the year, despite the temporary bounce in January.

The softness in the underlying pulse in spending was one reason that the Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.35% earlier this month. It, however, did not ruled out a further rise in interest rates.

Markets are still confident that the tightening cycle is over. Coupled with a cooling in the labour market, they expect the first rate cut could come as early as in September. 0#RBAWATCH

The HSI index is based on 12 spending categories and uses payment data from about 7 million CBA customers, comprising roughly 30% of Australian consumer transactions.