The CommBank Household Spending Insights Index (HIS) was flat in January, unchanged at 153.4, with some mixed fortunes for hospitality as monthly spending un January dropped one per cent, while the annual rate of change in the HIS saw hospitality spending increase eight per cent.
The CommBank HIS tracks month-on-month data around approximately seven million CBA customers, which it says comprises roughly 30 per cent of all Australian consumer transactions.
Food and beverage goods spending, which covers Australia’s off-premise, saw spending increase by 0.5 per cent in seasonally adjusted terms in January, following a small 0.1 per cent lift in December. The annual rate of change inf food and beverage spending slowed to rise to 4.6 per cent per year to January 2025.
“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,” Allen added.