CBA’s household spending insights indicator fell 1% m/m in October after posting four consecutive monthly rises. It is now 2% higher than a year ago after an upwardly-revised 3.6% in September. The series has been revised due to some compositional changes. It has a high correlation with the ABS retail sales data and so October may also show a fall when it is released on November 28. CBA is forecasting a 0.6% m/m drop. The November rate hike is likely to weigh on spending going into 2024.

• The October drop in transactions-based spending was driven by recreation, hospitality, food & beverages and household goods. But there was increased spending on utilities, transport and education. The series is seasonally adjusted but nominal.
• Services spending fell 0.1% m/m in October after -1.3% to be up 4.6% y/y and goods fell 2% m/m after -0.7% to be up 0.5% y/y. Discretionary spending fell 3.7% m/m after 2.9% to be down 1.5% y/y, whereas essentials rose 0.3% m/m and 5.2% y/y, reflecting the higher cost of living.
• The October CBA home buying index fell 0.7% m/m after -0.4% but rose to -8.1% y/y from -10.2%.