Belinda Allen, Senior Economist at CBA, has released more positive economic data, with CBA household credit and debit card spending continuing to rise:
CBA household credit and debit card spending inched higher in annual terms and is up 13%/yr for the fortnight to 4 Dec 20.
The easing of restrictions in SA has seen a lift in card spending in the state back to pre-lockdown growth rates.
There has been a general lift in recreation spend as well as eating and drinking out as restrictions are eased in the two largest Australian states.
The past fortnight covers Black Friday and Cyber Monday. There is now a seasonally sharp increase in sales each year over this period.
Looking at the data in annual change terms over the past two weeks removes the distortion caused by the seasonal spike in sales.
Total card spend for the fortnight ended 4 December remains buoyant and is running at 13%/yr.An easing of restrictions in some states and the reopening of state borders have seen spending lift in the past fortnight.
Spending on goods tracked sideways in annual terms over the week.Services spend lifted over the past fortnight as restrictions were eased and confidence in the control of the virus remains in place. There was a big lift in card spending on eating & drinking out.
Spending momentum ticked up in QLD and Vic in the past fortnight while it tracked sideways in NSW and WA.The two largest states of NSW and Vic have seen a tick up in spending in Q4 to date when compared with Q3.
Annual card spending growth in SA lifted back to pre-lockdown growth rates as the state reopened. The ACT, NT and Tas recorded stable growth rates in the past fortnight but the pace of growth also remains stronger than in Q3.
Spending patterns have largely returned to pre lockdown levels in SA.
Online spending continues to grow at a much faster pace than in store spending in the state.
Spending on eating out lifted sharply in Vic over the past fortnight as restrictions were further eased with more patrons allowed in a venue. Restrictions have been further eased in NSW with a two square metre rule now in place.
This will lift capacity for large restaurants and drinking establishments so we would expect to see a lift in card spending in the coming weeks. Jobs in the hospitality sector return in NSW ahead of the summer trading period.
There has been a significant reopening of Australia’s state borders over the past two weeks with most borders already reopened and travel from NSW &Vic to WA permitted from 8 Dec.
Recreation spend had been lifting across most states and we would expect further lifts in spending as air travel capacity lifts and the summer holidays commence.
Note: Weekly CBA household credit & debit card spend data is derived from transaction authorisations to give a near real-time view. This means that cancelled authorisations, refunds, reversals, etc will not be included. Data has not been adjusted for effects of consumers substituting between cash and card payments.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
