There is a perception that consumers are gloomy and not spending. And while Aussies aren’t overly positive according to sentiment surveys, they are indeed spending. In May, official Reserve Bank data showed that there were over 700 million purchases made with plastic cards (credit and debit cards), a result only exceeded by December last year (708 million), a peak time for spending. Those 706 million purchases equate to almost $51 billion in sales. The Bureau of Statistics (ABS) has already reported a firm 0.6 per cent lift in retail sales in May after a solid 1 per cent lift the previous month. But, it appears – as many had already surmised – that the ABS data under-represents the amount of economy-wide spending – failing to pick up increased spending on services like travel and business transactions.
Ordinarily spending in May doesn’t approach the levels reached in December, but not so this year, spending just fell short of the peak spending period. The number of credit and debit card purchases is up 16 per cent on the year with the value of purchases up 11 per cent.
The full text of this article is available to MacroBusiness subscribers
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
