Bank Data Tentatively Signalling Consumer Slowdown

Partial data from two of Australia’s big banks is suggesting that spending in the first two weeks of December was quite soft. There are some special factors but it could be tentatively signalling the start of a consumer slowdown. The RBA is likely to be watching closely as households are one of its main concerns.

• ANZ data based on card transactions showed that spending during November 20 to December 18 was only 10% above the same time in 2019 despite consumer prices being 10.5% higher over the same time. ANZ observes that this is the start of the rate and cost-of-living induced slowdown in consumer spending, which is expected to become more pronounced in 2023. This data covers spending on both goods and services.
• The non-food retailing ANZ measure is in line with December 2019 and much lower than 2020 and 2021, which were boosted by Covid-restrictions related pent up demand, elevated savings and inability to travel.
• Westpac’s Card Tracker Index for the two weeks to December 17sharply unwound its gains from the previous two weeks falling 13.6 points. Currently, Westpac isn’t too concerned as it pointed out the series isn’t seasonally adjusted and has been impacted by Black Friday discounts. It noted that the final Christmas data and the state of spending going into 2023 will be more important.
• November retail sales print on January 11.