New figures from the Australian Bureau of Statistics showed household spending was running at a healthy 7.6 per cent annually in April, prior to the Reserve Bank of Australia lifting the cash rate in May.

"As COVID-19 restrictions eased, household spending increased in eight of the nine spending categories in April 2022 compared to April 2021," ABS head of macroeconomic statistics Andrew Tomadini said.

"Spending in recreation, hospitality and retail continued to rise. Spending on health was the only category to decrease in April 2022."

Separately, the CommBank household spending intentions index also made a partial recovery in May, rising by 2.9 per cent after falling in April due to public holidays in the month.

The index - which reflects CBA payments data, loan applications and publicly available search activity on Google Trends - increased across seven of 12 categories in May.

But CBA senior economist Belinda Allen warned higher prices and rising interest rates will impact household spending.

"We're seeing early indicators of softness in CBA credit and debit card spending data, with discretionary spending on recreation, clothing and footwear, and household furniture and equipment, trending slightly down," Ms Allen said.

There was also further pain for household budgets with petrol prices ticking up again in the past week.

The Australian Institute of Petroleum said the national petrol price average rose 2.1 cents to 199 cents per litre in the past week.

But Victoria, South Australia, Western Australia, the Northern Territory, Tasmania and Canberra were all paying more than $2 per litre.

Further jarring consumer confidence will be a slump in Australian shares.

Tens of billion of dollars were wiped off the market on Tuesday after Wall Street tanked either side of the weekend.

The US sell off was sparked by fears of aggressive interest rate increases by the Federal Reserve after inflation remained stubbornly above eight per cent.

CBA economists now expect the RBA's cash rate to rise to 2.10 per cent by the end of 2022, from 0.85 per cent currently, after upwardly revising an earlier forecast of 1.60 per cent.

The bank also cut its economic growth forecast for 2022 to 3.5 per cent, from 4.7 per cent previously, and is predicting a 15 per cent drop in Australian house prices by the end of 2023.

Meanwhile, the National Australia Bank survey for May showed business confidence fell four points to six index points, holding just above its long-term average.

"Businesses are facing a new environment of higher inflation, rising interest rates, and risks to global growth," NAB chief economist Alan Oster said.

"However, confidence is still at a fairly robust level all things considered."

Business conditions also eased two points to an index of 16 points, remaining well above average after a strong first few months of the year.

The trading and profitability sub-indices both eased, while employment edged higher.

Mr Oster said across the states and in most industries conditions remained relatively strong, although construction was one area of concern.

"Profitability is under increasing pressure in construction, with the survey's profitability index into negative territory, far below what we are seeing elsewhere," he said.

But overall, Mr Oster said forward indicators in the survey, such as a rise in new orders, suggest the underlying outlook for Australia's economy remains positive.

"Capacity utilisation is now around the record high levels seen just before the Delta outbreak in 2021, which should support investment and hiring over coming months," he said.

Australian Associated Press