The CommBank Household Spending Insights (HSI) Index increased by 0.8 per cent to 152.5 in October, led by spending on Household Goods (+2.5 per cent) and Recreation (+1.6 per cent), as consumers snapped up tickets to major music and sporting events.
Spending on ticketing services was up 27 per cent for the month with concerts including Oasis, Luke Combs and Metallica, as well as the Melbourne F1, all going on sale in October.
The strength in spending on Household Goods was driven by spending at online marketplaces, hardware stores and discount department stores. Ten of the 12 spending categories rose in October, with only Education (-1.3 per cent) and Utilities (-3.4 per cent) falling, the latter due to government rebates on energy bills.
“Spending rose marginally in October as income tax cuts, lower petrol prices and energy rebates freed some consumers up to spend on discretionary items. It’s important to note however that this increase in discretionary spending only partially offset the fall seen in September as the October boost was driven by a number of one-off major events,” CBA Chief Economist Stephen Halmarick said.
The annual rate of spending growth increased to 4.9 per cent from 2.1 per cent in September, continuing the choppiness in spending seen throughout the year. This was likely also boosted by an extra weekend day in October 2024 relative to last year.
On an annual basis, the fastest growing spending categories in the year to date are Health (+10.6 per cent), Recreation (10.5 per cent) and Communications and Digital (+8.4 per cent). The only falls in spending in the year to date can be seen in the Transport (-5.8 per cent) and Utilities (-5 per cent) categories.
Spending by renters continues to be the weakest sector by home ownership status, rising by just 1.8 per cent in the year to date, compared to those with a mortgage (+3.4 per cent) and those who own their home outright (+4.4 per cent).
Mr. Halmarick said household spending was unlikely to meaningfully move higher until there is an interest rate cut.
“Higher disposable income from the July income tax cuts, combined with lower petrol prices and lower utility bills may have helped strengthen spending in recent months, however the increase is likely softer than would have been expected by the RBA. We don’t anticipate seeing a substantial increase in consumer spending until the RBA commences an interest rate easing cycle, which we now expect in February 2025,” Mr. Halmarick said.
The CommBank HSI Index tracks month-on-month data at a macro level and is based on de-identified payments data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions.
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NOT INVESTMENT RESEARCH. The Commonwealth Bank ‘Household Spending Insights’ is not investment research and nor does it purport to make any recommendations. The Commonwealth Bank ‘Household Spending Insights’ has been prepared without taking into account your objectives, financial situation (including your capacity to bear loss), knowledge, experience or needs. You should not act on the information contained in this document. To the extent that you choose to make any investment decision after having read this document, you should not rely on it but consider its appropriateness and suitability to your own objectives, financial situation and needs, and, if appropriate, seek professional or independent financial advice, including tax and legal advice. The data used in the ‘Commbank Spending Insights’ series is a combination of CBA Data and publicly available Australian Bureau of Statistics (ABS), CoreLogic and Reserve Bank of Australia data. Any reference made to the term ‘CBA data’ means the proprietary data of the Bank that is sourced from the Bank’s internal systems and may include, but is not limited to, home loan data, credit card transaction data, merchant facility transaction data and applications for credit. All customer data used, or represented, in this report is de-identified before analysis and is used, and disclosed, in accordance with the Group’s Privacy Policy.
