CommBank reported a dip in household spending on utilities in August due to government electricity rebates, while rising university and school fees drove a notable increase in education spending.
In the lead-up to an early Father’s Day, the CommBank household spending insights index rose 1.8% in August, reaching 154.3.
Consumers were seen splurging at hardware and department stores, as well as on men’s clothing. Restaurants, pubs, and bars also experienced a notable rise in spending.
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Out of 12 tracked categories, 10 showed an increase, with Hospitality up by 5.2% and household goods by 4.4%. Dining out and event bookings also surged as families prepared for the early Father’s Day celebration.
August saw a 3.6% rise in education spending, driven by university and school fees.
Other categories that saw growth included food and beverage (1.2%), household services (1.8%), and motor vehicles (1.4%).
Despite the August bump, yearly spending growth remains relatively low at 3.7%.
“The early Father’s Day has boosted August figures, but the annual rate suggests consumer spending is still weak,” said Stephen Halmarick (pictured above), CBA chief economist.
The only two categories to drop were utilities and transport, each falling by 0.3%. Lower fuel prices and electricity rebates helped ease household costs, providing some financial relief, especially for those with mortgages.
Renters saw an increase in annual spending growth to 1.3%, while those with mortgages and outright homeowners showed slower growth in comparison.
Halmarick noted the significance of reduced utility costs for homeowners, stating, “This is a bigger part of their spending, so rebates had a notable impact.”
Although the early timing of Father’s Day added complexity to the data, Halmarick expects softer economic conditions, easing inflation, and international rate cuts to push the Reserve Bank (RBA) toward reducing interest rates, possibly later in 2024 or early 2025.
The CommBank household spending insights index, which monitors spending trends from over 7 million customers, captures approximately 30% of Australian consumer transactions.
Read the The CommBank Household Spending Insights (HSI) Index and the CommBank media release. To compare with the previous results, click here.
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