Westpac’s credit card tracker is registering a meek rebound.
― The Westpac Card Tracker Index* showed a little more life over the first two weeks of August, rising 1.5pts to 136.9. While that puts the index on a par with the high seen late last year, trend growth remains disappointing, barely tracking a small positive. Activity has firmed a little since the ‘Stage 3’ tax cuts came into effect but still looks to be declining in real, per capita terms.
― Momentum-wise, quarterly growth is tracking at 0.2%, up from 0.7% in July but in line with the average over the previous ten months. The underlying trend may be a little firmer than this suggests given disruptions from the Crowdstrike outage that impacted in the third week of July. But even allowing for this the signal is unlikely to be strong. It would take another gain along the lines of the 4pt rise seen in the latest week to produce a decisive positive signal.
― The category and state detail remains largely the same, the detail pointing to some improvement in discretionary segments but continuing to suggest the tax cut boost to activity so far been minimal. Indeed, rather than generating any strong outright gains, fiscal boosts may have just cushioned what would otherwise have been a further weakening.
― The early signs continue to suggest fiscal measures are having only a muted impact so far. That signal should become clearer as other indicators for the July month become available over the next few weeks. But as at mid-August our card tracker data implies consumers are mostly sitting on the extra tax cut cash rather than spending it.
So, it appears we’ll see another negative growth quarter for consumption in June.
Only a treasurer as inept as Jim “Chicken” Chalmers could deliver tax cuts that result in an ongoing recession.
If tax cuts are not going to lift consumer volumes, and no imminent rate cuts will do so either, then we might ask is Albo going to deliver an entire term of per capita recession?
So far, per capita growth is down a cumulative 1.2% since Albo’s dills took power with only two of eight quarters in the black.
And, of course, this understates the pain, which is much deeper in income terms:
It is hard to believe a government can get re-elected on this appalling record.
