The monthly CommBank Household Spending Insights (HSI) Index declined 0.7 per cent in September to 146.7, despite increased recreation spending around the AFL and NRL Grand Finals.
Six of the twelve spending categories saw a decline in the month, with Hospitality leading the drop (-2.8 per cent), followed by Transport (-2.5 per cent), Household Goods (-2.3 per cent), and Food & Beverage (-0.6 per cent).
Recreation helped offset these declines, rising 1.5 per cent in September, largely driven by an 18 per cent surge in Ticketing Services as eager sports fans snapped up tickets to the AFL and NRL grand finals. Spending on Education and Insurance also rose, each up by 0.7 per cent. Utilities spending, unexpectedly up 1.3 per cent, reflected the impact of rising local council and strata management fees, even as electricity costs declined off the back of government rebates.
There has been a notable decline in spending on Transport, impacted by the falling price of petrol, down approximately 15 per cent in the past 12 months. Transport was the only category to record declines both monthly (-2.5 per cent) and annually (-7.2 per cent).
On an annual basis, there was a significant slowdown in the pace of spending growth in the year to September to just to 2.1 per cent, down from 3.7 per cent in August.
Renters have witnessed the weakest spending in the year to September, down 1.1 per cent for the year, compared to though with a mortgage (+1.2 per cent) and those who own their home outright (+2.3 per cent).
CBA Chief Economist Stephen Halmarick said HSI data suggested income tax cuts had not led to a material rise in consumer spending.
"The spending slowdown in September was expected after an early Father's Day led to consumers splashing out on household goods and hospitality for Dad. Although we saw a rise in Recreation spending associated with the AFL and NRL Grand Finals, consumer spending overall remains subdued, now growing at just over two per cent for the year."
"It's important to note that the only other spending categories to rise in September were all essentials, indicating that increased take-home pay from tax cuts is largely being used to pay down debt and on staples, not spending on discretionary items. This trend is reflected in the year to September, supporting our view that softer economic data, coupled with a further deceleration in inflation will see the RBA cut interest rates in December 2024."
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.
Go to CBA Newsroom for the latest news and announcements from Commonwealth Bank.
