CBA Household Spending Intentions Trending Down

The CBA’s measure of household spending intentions for April fell 4.3% m/m to be up 3.7% y/y after rising 8% m/m and 3.9% y/y the previous month. The series is not seasonally adjusted and part of the weakness was driven by fewer trading days but the annual rate has been gradually moderating since the start of 2023. Given higher rates and cost-of living it is likely to continue declining over the year. The series is nominal and so has been boosted by inflation.

• The April weakness was driven by a sharp drop in spending on home buying (-13.9% m/m -12.1% y/y), health & fitness (-13.7% m/m -2.4% y/y), transport (-10.5% m/m +26.5% y/y) and household services (-7.4% m/m +3.9% y/y). Home buying intentions in particular were impacted by fewer working days in April and it is worth noting that it rose in both February and March.
• Retail spending intentions fell 1% m/m after rising strongly in March +12.6%. CBA reports that the seasonally adjusted series has been moving sideways over recent months. The retail component is up 2.6% y/y in April after 3.7% in March.