CBA Chief Economist Stephen Halmarick said: “The improvement of the index in July was narrowly based on the Entertainment, Transport, Retail and Utilities sectors and reflects the impact of higher prices.
“While consumer spending remains higher than a year ago when much of Australia’s East Coast was in lockdowns, we’re also seeing a moderation in spending growth in interest rate sensitive sectors.
“We can expect consumer spending will slow further over the coming months as higher interest rates feed through into household budgets and as the Reserve Bank of Australia increases the cash rate further in pursuit of its goal to curb inflation,” Mr Halmarick said.
CBA’s economics team is forecasting further interest rate increases by the Reserve Bank of Australia of 50bp in September and 25bp in November to a terminal rate of 2.60 per cent, before interest rates are expected to be cut towards the end of 2023.
The CommBank HSI Index combines analysis of CBA payments data (Australia’s largest consumer spending data set covering approximately 40 per cent of payment transactions), loan application information and Google Trends publicly available search activity data. To access this powerful insight into spending trends visit www.commbank.com.au/hsi.
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