CBA Spending Insights Shows Continued Soft Consumption

CBA has revamped its household spending intentions series and it is now called Household Spending Insights (HSI). The new series is more closely correlated to nominal retail sales than the old one was (see chart). It was flat in July rising 1.3% y/y after 0.5% m/m and 1.2% y/y in June. It is signalling that retail spending is likely to remain weak given rate and cost-of-living pressures.

• The HSI is a seasonally adjusted composite of payments data from CBA customers which cover 30% of Australian consumer transactions. It is census weighted to make it representative of the country as a whole. It includes 12 categories and now has goods vs services, retail vs non-retail, non-discretionary vs discretionary breakdowns.
• The July softness was not broad based with only 5 of the 12 categories recording a monthly fall. Household goods rose 2.1% m/m whereas household services fell 5.5%.
• Goods spending rose 1.1% m/m to be down 1.3% y/y whereas services remained solid rising 0.6% m/m to be up 3.6% y/y. Retail spending is up 0.8% y/y and non-retail +0.6%. Essential consumption rose 2.3% y/y with discretionary slightly lower at +1.7%.
• The Home Buying Index rose 2.1% m/m after falling 13.7% in June. It is now down 9% y/y an improvement from -14.8%.
• See CommBank Household Spending Insights here.

Source: MNI - Market News/Bloomberg/ABS