Australian household spending experienced a significant boost during the festive season, according to the latest CommBank Household Spending Insights (HSI). Food and beverage purchases saw a notable increase of 1 per cent in December, marking the largest rise since April. Hospitality spending also contributed to the surge, climbing by 0.7 per cent, indicating a strong consumer appetite for dining out and socialising during the holiday period.
The HSI Index has now recorded 15 consecutive months of growth, with annual growth reaching 6.3 per cent. This sustained expansion suggests that household consumption is currently running slightly ahead of expectations. Belinda Allen, CBA’s head of Australian economics, commented that the strength in household spending towards the end of the year was more robust than initially anticipated, demonstrating a consumer willingness to spend beyond previous forecasts.
Other sectors also experienced notable increases. Utilities spending surged by 6.4 per cent, influenced by the expiration of government energy rebates, while communications and digital services rose by 0.7 per cent, reflecting the ongoing importance of connectivity. Transport spending also saw an uptick, climbing by 0.5 per cent. Geographically, Western Australia led the gains with a 0.9 per cent increase, followed by Queensland at 0.7 per cent. NSW and Victoria experienced more moderate growth, both posting increases of 0.1 per cent.
This robust spending streak is expected to add pressure on the Reserve Bank of Australia (RBA) ahead of the December quarter CPI release. According to Allen, the economy may be operating “at or above its speed limit,” potentially strengthening the argument for a February rate hike. The Commonwealth Bank of Australia, commonly known as CommBank, is an Australian multinational bank with businesses across financial services including retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services. CBA is one of Australia’s largest listed companies on the Australian Securities Exchange.
