October 2022 recorded a 20.7% increase in household spending compared to October 2021, but this is not as large a difference as September (28%) and August (29%).
The ABS recommends focusing on these year by year changes to track household spending, as month to month differences are affected by seasonal variability at the moment.
ABS head of macroeconomic statistics Jacqui Vitas said that COVID-19 continued to be the biggest factor influencing the numbers.
“The through-the-year rise was more moderate than previous months, which coincides with less COVID-19 Delta lockdown impacts this time last year,” Ms Vitas said.
“Spending in Transport (up 42.3%), Hotels, cafes and restaurants (up 39.9%), and Clothing and footwear (up 32.2%) all saw strong increases but have slowed in comparison to the previous two months.
“In contrast, spending categories not as negatively impacted by the lockdowns - Food (up 4.5%) and Furnishings and household equipment (up 1.8%) - saw only small rises compared with October 2021.”
Discretionary household spending rose 20.4%, driven by spending in recreation, culture, clothing and footwear.
Non discretionary household spending was up 21%, predominantly driven by demand for transport services gradually returning to pre pandemic levels.
By the same metric, all states and territories saw increased household spending in October 2022 compared to 2021.
The biggest rises came in Victoria (32.8%) and the ACT (36.6%), which had stricter COVID protocols at the same time last year.
In New South Wales for example, where COVID restrictions were much more relaxed by October 2021, only increased by 16.5% compared to a 38.2% increase from September 2021 to September 2022,
However, this reduction in growth may also be indicative of the expected decline in spending as people respond to the cash rate hikes.
Typically, there tends to be about a three-month lag between interest rates rising and consumers feeling the impact, according to CBA head of Australian economics Gareth Aird.
The RBA today announced another 25 basis point increase, bringing the cash rate to 3.1% - a 10-year high.
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