Household spending grew 0.3 per cent in June, according to the Commonwealth Bank's latest household spending insights index released on Thursday.
Spending in the communications and digital category rose one per cent, likely supported by the release of the Nintendo Switch 2, which sold 3.5 million units globally in its first four days, becoming the Japanese gaming giant's fastest-selling piece of hardware.
But spending growth across all categories was down from the 0.4 per cent rise in May, despite more consumers benefiting from the Reserve Bank of Australia's May 20 interest rate cut.
"This recovery is taking longer than expected to occur but there are green shoots emerging," CBA senior economist Belinda Allen said.
"Spending around sales events and new items show consumers are still deliberate on their spending decisions.
"At the same time, there remains a clear preference to save and pay down debt."
Data released by the bank showed just one in 10 mortgage holders reduced their repayments following the May rate cut.
CBA, which holds about a quarter of Australia's home loan market on its books, only reduces a customer's repayments if they opt in to do so.
Otherwise, their repayment rate remains the same, resulting in the customer paying off their mortgage earlier.
Published consumer sentiment surveys this year have shown households are taking time to regain confidence, with global uncertainty adding to scarring caused by the reduction in disposable incomes during the recent inflation spike.
CBA still expects the central bank to cut interest rates by 25 basis points in August, with another reduction tipped for November, but Tuesday's surprise hold will do little to boost spirits.
"While we still anticipate a pick-up in household spending in 2025, a slower rate-cutting cycle could soften this recovery over the remainder of the year," Ms Allen said.