CBA Note ~2ppt Fall From Peak In Card Spending

CBA’s note that their “internal credit & debit spending data to the 15th July shows that consumers are reacting to higher interest rates and cost of living pressures by moderating consumer discretionary spending. Smoothing out volatility due to public holidays and the end of financial year, the peak in spending according to CBA data looks to have occurred in mid‑May, just as the RBA started to lift the cash rate. Since then there has been around a 2 percentage point fall in card spending, although the softness has been largely concentrated in discretionary spending categories. Consumer spending is starting to reflect recent falls in consumer sentiment. It is important to remember the data is presented in nominal terms indicating that the trend we are seeing likely represents further weakness in volumes given inflation pressures evident at present. Nominal spending has continued to lift in categories including transport and domestic fuel & power.”