AUSTRALIA DATA
CBA’s household spending insights (HSI) for May rose 1.1% m/m to be up 4.3% y/y after -0.8% m/m and +2.7% y/y. The series has a high correlation with the ABS’ retail sales values and is implying that sales growth was probably still weak in May but may have picked up a bit. Most components rose on the month but the items that fell were discretionary.
- CBA doesn’t believe that the July 1 tax cuts will boost spending significantly. The May Westpac consumer confidence survey reported that 30% plan to save all the cuts and 50% at least half.
- The contrast between discretionary and essential can be seen comparing recreation which fell 2.2% m/m to utilities up 1% m/m and they are +2.6% y/y and +7.1% y/y respectively. Total essential spending has averaged 0.4% m/m over the last four months while discretionary has averaged -0.6% m/m.
- Goods spending rose 2.3% m/m in May to 4.1% y/y, while services rose 0.6% m/m to be up 7% y/y.
Australia CBA HSI vs retail sales values y/y%
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