The CommBank Household Spending Intentions (HSI) Index fell 4.3 per cent in April as a result of fewer trading days in the month with the Easter and Anzac Day public holidays, while the lagged effect of recent Reserve Bank of Australia (RBA) interest rate increases is expected to further weaken consumer spending over coming months.

The CommBank HSI Index was led lower by reduced spending intentions in home buying, health & fitness, transport and household services. Retail spending intentions also fell 1 per cent following a strong 12.6 per cent rise in March, although retail spending has tracked sideways in seasonally adjusted terms over recent months.

Spending intentions on motor vehicles increased strongly by 5.3 per cent, as consumers continued to take advantage of increased imports and stock post-Covid. A slight decline in purchases was offset by increased car loan applications – electric vehicles now account for 8 per cent of sales, up from 1.1 per cent a year ago.

Higher utilities bills saw utilities spending continue to climb, up 7 percent on April last year - the fastest annual pace of growth in utilities spending since the HSI was introduced in 2018.

Commonwealth Bank of Australia Chief Economist Stephen Halmarick said weaker spending in April reflected the increasing cost of living for Australians, while the number of public holidays also impacted activity.

“Spending activity continues to moderate in response to the increased cost of living, with annual spending growth falling to 3.7 per cent in April from a peak of 15.2 per cent in August 2022 and well below the rate of inflation at 7 per cent.

“With the RBA increasing interest rates again last week to 3.85 per cent monetary policy is now highly restrictive and we expect the lagged effect of higher interest rates will further weaken household spending as the year progresses.

“However we believe this latest increase will mark the peak in the cash rate, and that the RBA will commence interest rates cuts later this calendar year as inflation starts to trend downwards towards the Reserve Bank’s 2-3 per cent target range,” Mr Halmarick said.

CBA economics team is forecasting a significant reduction in the budget deficit in the Federal Budget 2023-24 to be announced later today and measures to support more affordable housing.

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:

Household Spending Intentions Index — April 2023



Go to CBA Newsroom for the latest news and announcements from Commonwealth Bank.

Disclaimer: The information contained in this media release is published solely for informational purposes and provides general market-related information, and is not intended to be an investment research report. This media release has been prepared without taking into account your objectives, financial situation (including the capacity to bear loss), knowledge, experience or needs. Before acting on the information in this media release, you should consider its appropriateness and, if necessary, seek appropriate professional or financial advice, including tax and legal advice. The data used in this media release is a combination of ‘CBA transaction data’ and Google Trends™ data. Google Trends is a trademark of Google LLC. The term ‘CBA transaction data’ refers to the proprietary data of the Commonwealth Bank of Australia ("the Bank") that is sourced from the Bank’s internal systems and may include, but is not limited to, credit card transaction data, merchant facility transaction data and applications for credit. The Bank takes reasonable steps to ensure that its proprietary data is accurate and that any opinions, conclusions or recommendations are reasonably held, or are made at the time of compilation of this media release. As the statistics take into account only the Bank’s data, no representation or warranty is made as to the completeness of the data and it may not reflect all trends in the market. All customer data used or represented in this media release is anonymous and aggregated before analysis, and is used and disclosed in accordance with the Bank’s Privacy Policy Statement. Full disclosures and disclaimers.