Weakness in these categories was partly offset by increased spending on utilities (+2.2 per cent) and Transport (+2.0 per cent) as households manage higher energy bill and petrol prices.
CBA Chief Economist Stephen Halmarick said: “October’s CommBank HSI Index demonstrates a clear tightening in consumer spending compared to September’s result, which was buoyed by a number of one-off events like the FIFA Women's World Cup.
“We are clearly seeing the flow on effects of the interest rate increases from earlier in the year.
“Last week’s decision from the RBA to raise the case rate by a further 25 basis points, to 4.35%, is likely to add further downward pressure to household spending over coming months. However, November will be an interesting one to watch with potential increases in spending due to the November sales.
“Looking ahead, our base case is no further increases in the RBA cash rate, although there remains upside risk based on the inflation figures due at the end of January.”
The CommBank HSI index – which tracks month on month data at a macro level and is based on de-identified payments data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions – also showed sharp differences among certain states and territories.
The Northern Territory saw the strongest growth in household spending in October, up 1.1 per cent, followed by Tasmania (0.5 per cent).
“There is a clear East versus West divide, with New South Wales and Victoria the weakest of the states, likely driven by how highly leveraged these states are,” commented Mr Halmarick. Victoria saw a large decline in spending in October down 1.5 per cent for the month, while New South Wales fell -0.9 per cent.
October’s HSI data has been refined to more accurately capture household spending, removing some categories that relate to investments and incorporating Buy Now Pay Later data, to provide a more complete picture of household spending in the Australian economy.