If credit card usage is any guide that is. Given the moderation coincides precisely with the Ukraine war and inflation panic my bet is this si more related to fear of rising interest rates. Westpac with the note.
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― The Westpac Card Tracker Index nudged 0.7pts higher to 106.7 over the week to April 2. However, momentum is starting to show clearer signs of a moderation from the 109-110 reads seen through February and March. The latest read means annual growth in card activity is tracking 6.7pts above its pre-COVID pace (see p6 for more details on how the index is constructed).
― A trend moderation is apparent across all states but is slightly more pronounced in NSW. Most state indexes are in the 106-108 range, SA a touch softer at 103.3. The bulk of the slowdown is coming through discretionary categories, especially services. That said, in some cases, such as travel, this looks to be coming from noise in the base period for comparison rather than weakness now. This may become more of an issue as we head into the Easter period due to differences in the timing of this public holiday.
― The detail continues to show some familiar themes. Fuel spend remains elevated on high prices but should see some shifts in coming weeks as the ‘cost of living’ measures in the Federal Budget (see here) that included a temporary halving in fuel excise tax come through. Travel has also continued its resurgence, a likely harbinger of increased tourism activity over the coming Easter period. Other segments have seen some softness that may be an indirect effect of these shifts.
― Persistent inclement weather may also be having an effect at the margins, particularly in NSW and Qld. Weather effects can be tricky to pinpoint in spending, particularly when there are other major influences at play such as high fuel prices. However, they show through clearly in reduced mobility with some marked reductions in Brisbane and Sydney through February and March.
