CBA Card Spending Data Shows Marginal Fall

CBA note that their internal credit & debit spending data for the fortnight to 17 June 2022 shows that spending growth fell marginally with week to volatility still at play in the data. Household spending remains elevated, but the rapid rate of growth observed at the start of the year has stopped and instead a moderate softening is underway. The data is presented in nominal terms indicating that the trend we are seeing likely represents at least some weakness in volumes. We will be watching the data closely in coming months for a more material downturn in spending as financial conditions continue to tighten and sentiment remains in deeply pessimistic territory. Around the country, QLD was the only state where spending growth increased. It is our view that the impact of higher inflation and tightening monetary policy will impact household spending, with discretionary sectors likely to feel it first. To this end, we have been closely monitoring discretionary sectors in the card spend data. The household goods category continues to edge lower. Dining and drinking out, recreation as well as clothing and footwear rose in the fortnight but are still down when smoothing using a four week average. Transport spending growth rose strongly in the first week of the fortnight and is increasing on a smoothed basis. This likely represents the high fuel prices across the country. Spending growth on utilities fell in the fortnight but it is a volatile category. The widely reported issues with the energy system are likely to increase prices throughout the second half of the year which will place added cost of living stress on consumers.”