CBA Spending Indicator Points To Resilience But Falling Volumes

CBA’s household spending insights (HSI) for September showed that consumption is holding up in value terms with Q3 seeing stronger growth than Q2 as consumers continue to spend savings and labour income remains robust. The HSI rose 0.5% m/m to be up 1.8% y/y following a downwardly-revised +0.5% and 2.1%, suggesting that spending volumes are still contracting. The series is based on the bank’s electronic transaction data and is seasonally adjusted. It has a very high correlation with the ABS retail sales data and is suggesting a small rise for September.

• The September rise was driven by restaurants, beverage goods, transport (boosted by higher fuel prices) and education. Household goods and services fell on the month.
• Services spending fell 0.3% m/m in September after +1% and goods rose 0.4% after +2.1%. They are now +0.9% y/y and +1.9% y/y respectively. Retail spending rose 1.7% m/m and 1.6% y/y and non-retail -0.2% m/m and +4.3% y/y.
• Essential spending continued to be prioritised and was unchanged in September and up 3% y/y, whereas discretionary fell 2.2% m/m to be only +1.5% y/y.
• The CBA Home Buying index fell 0.4% m/m after rising 0.6% in August. This left it down 10.2% y/y after -13%. Housing is expected to be supported by higher demand and CBA is forecasting prices to rise 9% y/y this year and 5% next.
• See report here.

Source: MNI - Market News/ABS/Bloomberg