Higher interest rates hit consumer spending

Tuesday 14 February 2023

There is growing evidence that the Reserve Bank of Australia’s (RBA) aggressive monetary policy tightening is starting to weigh on consumer spending.

Retail sales volumes fell by 0.2% quarter-on-quarter in the final three months of 2022, according to the ABS:

On Monday, home electronics retailer JB Hi-Fi has advised that its Australian stores recorded like-for-like sales growth of just 1.5% in January. CEO Terry Smart says “customers are being a bit more cautious than they were this time last year”.

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About the author

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.