CBA’s household credit and debit card spending surged in the week to 6 November as Victoria emerged from its 16-week lockdown:
Key Points:
CBA household credit and debit card spending has lifted over the week to 6 November and is now up 13%/yr.
All jurisdictions saw total spending lift. Annual card spend in Vic lifted 16ppts to around 15%/yr.
The easing of restrictions in Vic and the prospect of more open internal borders saw card spending surge.
The lift in spending highlights the importance of confidence in the health outcome and the level of income support in the Australian economy at present.
Total card spend for the week ended 6 November surged in the past week and is now running at 13%/yr. There was a lift in both online and instore spending showing the breadth of the rise.
Spending on both goods and services lifted over the past week, but services spending was the dominant driver. Services spending rose by 5%/yr and was the first positive print since the nationwide lockdown in March.
Annual spending growth in Vic surged around 16ppts higher to be up by15% on year-ago levels. NSW rose sharply also.
The other states have also seen a lift in spending over the past week.
Looking at Vic, pent up demand and an easing of restrictions saw spending rise in all but one category we track (communication was the exception).
Eating and drinking out still faces some restrictions but spending in this category is recovering and shows growing confidence in the health outcome.
Spending on drinking out has risen in Vic. But together with NSW where restrictions remain tighter than other states spending remains lower than a year earlier and suggests restrictions rather than confidence is a key driver.
Eating out is recovering quickly in Vic. A further easing of restrictions occurred on 8 November and more again on 22 November. Confidence in the health outcome will be crucial for recovery.
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.
Personal freedom and pent-up demand are working wonders.
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.
