The CommBank Household Spending Insights (HSI) Index rose by 0.8% in October, reaching 152.5, fueled by spending in household goods and recreation categories.
Pop concerts and sports events led ticket purchases, with spending on tickets soaring 27% for the month, boosted by major events like Oasis, Luke Combs, and Metallica concerts, as well as the Melbourne F1 Grand Prix.
October’s spending increase was primarily seen in household goods (+2.5%) and recreation (+1.6%), as consumers made purchases through online marketplaces, hardware stores, and discount department stores.
Notably, 10 of the 12 spending categories rose, with only education (-1.3%) and utilities (-3.4%) declining. The utilities category dropped largely due to energy bill rebates.
“Spending rose marginally in October as income tax cuts, lower petrol prices, and energy rebates freed some consumers up to spend on discretionary items,” said CommBank chief economist Stephen Halmarick (pictured above).
However, Halmarick cautioned that this rise followed a decline in September and was largely driven by one-time events, suggesting limited overall impact on sustained spending.
In September, the CommBank Household Spending Insights (HSI) Index dipped by 0.7% to 146.7, despite the excitement around major events like the AFL and NRL Grand Finals.
The annual spending growth rate improved to 4.9% in October, up from 2.1% in September, partly due to an additional weekend day.
Health (+10.6%), recreation (+10.5%), and communications and digital (+8.4%) were the fastest-growing sectors.
Transport (-5.8%) and utilities (-5%) saw the only declines in annual spending.
Renters continued to show the lowest growth at 1.8%, compared to 3.4% for mortgage holders and 4.4% for homeowners.
Halmarick noted that while recent income tax cuts and lower utility costs helped, meaningful consumer spending growth may require interest rate reductions.
“We don’t anticipate a substantial increase in consumer spending until the RBA commences an interest rate easing cycle, which we now expect in February 2025,” he said.
Based on data from approximately 7 million customers, the CommBank HSI index captures monthly consumer spending trends across various sectors, providing a comprehensive view of the Australian economy’s spending habits.
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