November Spending Boosted By Sales Events

The CBA’s nominal household spending insights (HSI) rose 1.8% m/m to be up 4.1% y/y in November from an upwardly revised -0.6% m/m and 2.4% y/y. The data were probably boosted by Cyber Week discounts, reflected in the 9.3% rise in household goods, signalling some resilience amongst households at the right price. However, real and per capita spending continue declining. The series has a strong correlation with ABS retail sales of over 85% and so is pointing to a solid rise in the November data released on January 9.

• CBA warn that there will be volatility over the summer reflecting various discounting events. It expects there to be payback for November’s strength in December. December 2022 fell 2.1% m/m.
• Goods prices rose 2.4% m/m and 2.5% y/y, reflecting sales events, and services increased 0.8% m/m to be up 5.8% y/y. Retail spending rose 3.5% m/m while non-retail was up 0.6%. Essential spending increased 0.3% m/m while discretionary +1.9%.
• Nine of the 12 sectors posted increases with only education, hospitality and transport declining on the month. Despite the strong monthly rise in household goods, the category is up only 0.9% y/y.
• The seasonally adjusted home buying index fell 4.6% m/m after -0.7% in October to be down 9.9% y/y from -8.1%. The November rate hike, deteriorating affordability and low supply are weighing on buyers’ sentiment.
• See CBA HSI here.

Source: MNI - Market News/Bloomberg/ABS