CBA with the note. Outside of forced spending on inflated staples and supply-side disruptions catch-up, the index is weakening materially.
The CommBank Household Spending Intentions (HSI) index for February2023 declined by small 0.1%/mth in original terms, following on from a large 6.8%/mth fall in January. The falls in February were led by declines in Entertainment, Retail and Travel. The shorter calendar month and slowing consumer spending led to the falls. These were partly offset by a seasonal rise in Home buying and Motor vehicles. After seasonally adjusting the data, the HSI index was up marginally in February 2023, with the Travel, Health & fitness and Transport stronger.
The annual rate of increase in the HSI index slowed to 4.5%/yr in February 2023. Higher prices are playing a key role,as is the slowing consumer environment given the material lift in interest rates since May 2022. With the RBA not quite finished lifting the cash rate and the lagged impact of rate rises still to come we would expect to see the HSI index weaken in coming months as consumer spending slows.
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