CBA: Consumer spending turns “less bad”

By Gareth Aird, Head of Australian Economics at CBA

Key Points:

  • CBA credit & debit card spend indicates that spending momentum has improved over the last two weeks.
  • Total spending is still well down on year ago levels, but the most recent data suggests that the pulse of spending has picked up across a range of goods and services and across all states and territories.
  • Online sales have lifted sharply over the past few weeks, particularly for retail items.

Insights on spending from CBA credit & debit card data:

Analysis from our CBA credit & debit card spend data to the fortnight ending 1 May offers a glimmer of hope that we may be past the low point in terms of the contraction in household expenditure. Total credit and debit card spend is still well down on year ago levels. But the annual rate of change has stepped up. Put another way, the second derivative has turned positive which means that the overall level of spending is now ‘less bad’.

Total spending over the fortnight to 1 May is down by 10% on year ago levels. That’s an improvement on spending to mid-April which was down by almost 20% on year ago levels. It is still early days and our data is somewhat volatile. But it looks to be the case that households have stepped up their rate of expenditure over the second half of April compared with the first half of the month. Our latest data predates any easing in restrictions. So it may be that households have responded positively to the slowdown in the rate of transmission of COVID-19. The improved news on the medical front may have given them a boost in confidence to go out and spend at those businesses that have not had to close their doors as a result of the shutdown.

It also looks like households have been more eager to get online, click the mouse and fill up the virtual shopping basket. Spending online has picked up materially over the past few weeks. Indeed spending on retail items online is up by 110% over the past fortnight compared to the same period a year earlier. Spending both online and instore remains down over the year on non-retail goods and services. But the rate of decline has eased over the past fortnight. Our data indicates that the ABS measure of retail trade will look a lot better than total household consumption over Q2 20. The main reason is that supermarkets comprise a much greater share of retail trade than they do of total household expenditure.

By spend category, there has been broad-based improvement in momentum over the past fortnight. Spending is still down sharply on clothing (-50%/yr), transport (-34%/yr), recreation (-29%/yr), personal care (-41%) and medical care and health (-16%/yr). But rates of change have improved. Spending is still up strongly on household goods and furnishings (+35%/yr).

Credit and debit card spend by state paints a similar picture. The spending pulse looks to have picked up in all states and territories over the past fortnight. Tasmania is the outperformer with spending down ‘just’2% on year ago levels. NSW and Victoria continue to underperform against the other states. Spending is down by 10% in NSW and by 14% in Victoria on year ago levels. QLD, WA, SA and the NT have all done better than the national rate.

Our latest data bolsters our view that the contraction in Q2 20 household expenditure will not be as big as the 20%/yr fall in goods and services spend that our credit and debit card spend was tracking at mid-April. We expected to see some degree of rebound in card spend and it looks like that is occurring right now. Any easing in restrictions coupled with positive news on the transmission of COVID-19 could be expected to further support household expenditure in the near term. Our forecast is for household consumption to contract by12% over Q2 20 and for GDP to fall by 8.5%over the same period.

See below for a variety of charts that capture the latest changes in spending from our CBA credit & debit card spend, including data by state.



  1. Where’s that bloke who kept saying that there was a consumer spending boom afoot because of JobKeeper and mortgage/rent holidays?

    • Don’t know but I’m trying to tease things out. I think that spending on household goods might be a bright light in consumption esp if this work from home thing is going to continue at an elevated level to pre-CoVid regardless of whether or not a vaccine arrives. People will want their home environment to ‘work’ for them if they will be spending the majority of their time there. That includes spending on the outside. I expect more people will pay attention to home maintenance and gardening than ever before. I also expect that given an increase in cooking there will be small kitchen appliance purchases going forwards.
      I guess some people will buy more clothes as part of a get out of jail reaction but lots of people have gone through wardrobes and decided to get rid of stuff (so are happier with what they have) or rediscovered clothes they forgot about. There is also the move towards buying second hand and being more environmentally responsible wrt clothing so maybe not. I have finally got my mother to agree to NEVER buy me another item of clothing in my life. I went through my wardrobe and decided to get rid of a small amount of clothing but I am set for life (almost).
      We have a tonne of food (figuratively speaking). It will take us a while to eat through it, plus our veggie garden is well planted and we are already harvesting 2 crops so our grocery spend is down to a couple of bags a fortnight on things like dairy, chocolate and a few misc items.
      I finally got paid jobseeker this week, so I went a month without income. I need to get my CoVid bonus before I spend anything extra because all my main payments atm are going to restoring my bank balance after bringing forward a lot of spending on necessities like vitamins and minerals (needed for a medical condition) and medicines. So even though I’m receiving some income it’ll be a while before I start spending much. Once that’s done I am going back to saving for that house deposit.

    • Glorious Taiwan

      It certainly looks as though there is a $10k super withdrawal led recover afoot.