Resilient Early October Card Spending

Australian banks CBA and ANZ have both reported slower but resilient card spending in the first half of October. Consumers’ expenditure and confidence continue to be moving in different directions.

• Australians are still spending, especially in Covid-impacted sectors such as travel and restaurants, despite depressed levels of consumer sentiment. Both banks believe that is because of very low unemployment expectations, the Covid build up in savings and that only about half of the 250bp of RBA rate hikes have so far been passed through.
• On a less positive note, CBA pointed out that spending strength was narrowly based and in the non-retail sector and online, and that spending volumes may have slowed. So, there may not necessarily be a robust October retail sales result.