CommBank HSI Index lifts during May across most categories, but discretionary spending starting to soften with rising cost of living.
Consumer spending intentions measured by the CommBank Household Spending Intentions Index rose 2.9 per cent in May to 115.9, although discretionary spending appears to be slowing after recent rate hikes.
The index - which combines
Increased home loan applications and housing searches on Google saw home buying spending intentions rise 14.8 per cent, down 3.3 per cent on
Greater numbers of Aussies on the move and higher petrol prices led transport spending intentions, rising 11.7 per cent in the month and up 70.1 per cent on
Travel spending intentions fell 1.5 per cent in May after recording a post-COVID high in April, but remain 52.3 per cent above
CBA Senior Economist
'Household spending intentions bounced in May after falling in April due to the number of public holidays. Given this seasonal volatility, the annual change of the CommBank HSI Index best reflects the state of our economy and it is up 7.9 per cent on the year - albeit due to higher prices rather than stronger volumes,' she said.
'Higher prices and rising interest rates will impact household spending. We're seeing early indicators of softness in CBA credit & debit card spending data, with discretionary spending on recreation, clothing & footwear and household furniture & equipment trending slightly down and increased spending on eating & drinking out down from a peak.
'The RBA rate hiking cycle is more aggressive than earlier expected and we have revised our interest rate forecast higher, as well as downgraded our economic growth outlook and dwelling price forecasts,'
CBA's economics team revised its forecasts following last week's larger than expected increase in the cash rate. The team has raised its cash rate target to 2.10 per cent from 1.60 per cent by the end of 2022, trimmed its GDP growth forecast for 2022 to 3.5 per cent from 4.7 per cent, and expects national dwelling prices to fall by around 15 per cent by the end 2023.
The CommBank HSI Index combines analysis of CBA payments data (
Household Spending Intentions Index -
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