 Index rose by 1.8% in August to 154.3 as consumers splurged in the lead-up to an early Father’s Day. ){kind=link}
The CommBank Household Spending Insights (HSI) Index rose by 1.8% in August to 154.3 as consumers splurged in the lead-up to an early Father’s Day.
10 of the 12 spending categories rose in the month, with hospitality (up 5.2%) and household goods (up 4.4%) leading the way.
University and school fees paid in August led to a jump in spending on education (up 3.6%), while food and beverage (up 1.2%), household services (up 1.8%), and spending on motor vehicles (up 1.4%) also rose.
The annual pace of spending in the year to August remains subdued at 3.7% for the year.
“An early Father’s Day boosted spending in August as consumers appear to have lifted spend on household goods, while hospitality venues also saw people open their wallets during the month,” says Commonwealth Bank of Australia Chief Economist Stephen Halmarick.
“The last time Father’s Day fell so early in the year, spending retreated in September, which is worth keeping in mind as the annual spending rate still suggests a relatively weak consumer.”
The biggest spending falls in August were utilities (down 0.3%) and transport (down 0.3%) as government rebates on electricity and lower petrol prices offered some relief to consumers. CBA says this led to notable shifts in spending across home ownership status as renters saw an uptick in the annual rate of spending to 1.3%, while those with a mortgage (up 2.8%) and outright owners (up 1.8%) saw a slowdown in spending compared to July.
“For the first time in August we saw the impact of the various government electricity rebates on wallets which can be seen by the decreased spending on utilities,” says Mr Halmarick.
“This, coupled with increased education spend, impacted spending across home ownership categories as we saw a jump in spending by renters likely due to university fees, while outright owners benefited from reduced spend on utilities as this is typically a larger share of their wallet.
“While the earlier timing of Father’s Day has added some complexity to the data, we still anticipate that softer economic conditions, easing inflation, and rate cuts by other central banks will prompt the RBA to lower interest rates later in 2024. However, there is a possibility of delays pushing this into early 2025.”