The monthly CommBank Household Spending Insights (HSI) Index rose 0.5 per cent to 137.4 in September, led by increased spending on hospitality and food & beverages, higher petrol prices and increased education spending.
However spending fell in five of the CommBank HSI Index's 12 underlying categories including recreation, utilities, health, household goods and household services, as annual spending growth dropped to 1.8 per cent from a peak of 18.7 per cent in August 2022 - well below the current rate of inflation and despite strong population growth. A separate Home Buying Index also fell 0.4 per cent in the month of September.
School holidays and the AFL and NRL finals series helped drive hospitality spending up 2.7 per cent in September, with increased spending in pubs, bars, fast food outlets and restaurants. Increased liquor store spending and higher prices also saw food & beverage 2.2 per cent higher.
The CommBank HSI index - which is based on de-identified payments data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions - also showed transport spending 1.5 per cent higher in the month, reflecting a 3 per cent increase in petrol prices. There was continued strong education spending which rose 1.4 per cent due an increase in overseas university students.
Victoria saw the joint biggest spending growth among the states driven by the AFL finals series, with spending up 1.5 per cent on the month. This reverses the recent trend of Victoria having the weakest monthly spending growth, but its annual spending growth remains the weakest of any state at just 0.2 per cent. ACT also saw spending growth of 1.5 per cent, up from 1.1 per cent in August. NSW and Queensland had modest monthly spending growth of 0.6 per cent, while Tasmania was softest on the month with a fall of -0.1 per cent.
CBA Chief Economist Stephen Halmarick said: "The monthly increase in the CommBank HSI Index has stabilised at 0.5-0.6 per cent since June, up from an average increase of 0.2 per cent from February to May. Recent household spending data has proved more resilient than expected. Part of this is price driven, but it also reflects strong income growth from the tight labour market and accumulated savings.
"Although the annual growth rate of spending remains weak, the lift of the Commbank HSI Index in September shows that the risk of a higher Reserve Bank of Australia cash rate remains. Forthcoming CPI and wages data for Q3 2023 will be critical for the future direction of interest rates."
