The monthly CommBank Household Spending Insights (HSI) Index was flat in January, unchanged at 153.4, as consumers took a breather from opening their wallets following sale activity in the final months of 2024.
Modest spending increases were seen across six of the 12 spending categories, with the most notable uplifts seen in spending on Motor vehicles (+1.5 per cent), Insurance (+1.2 per cent), and Health (+1.0 per cent).
The biggest spending falls in January were in Education (-1.8 per cent), driven by reduced spending on universities, Hospitality (-1.0 per cent) and Household Goods (-0.9 per cent).
"The flat January HSI result was somewhat expected following the spike in spending we saw in the last three months of 2024 off the back of Black Friday, Cyber Monday and Boxing Day sales. Essentials made up the three highest spending categories in the month as consumers pulled back on discretionary spending," CBA Senior Economist Belinda Allen said.
"We expect the RBA to lower interest rates at their first meeting of the year next week which will help provide a boost to consumer spending over the coming months. We anticipate a total of 100 basis points of monetary policy easing throughout 2025 to drive an improvement in the consumer spending pulse."
On an annual basis, homeowners with a mortgage (+3.0 per cent) have surprisingly seen a larger increase in spending compared to those who own their home outright (+2.8 per cent), while renters continue to lag (+2.0 per cent).
"The increase in spending by those with a mortgage can be attributed to the fact that not only are this cohort likely at a stage of life where they're spending on essential items, they're still dedicating a significant share of their wallet to recreation and entertainment," Belinda Allen concluded.
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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