Consumer Spending Plummets Across The Board
Consumer spending has collapsed as Australians households brace for a recession.
ANZ-observed spending data shows spending in the week to June 11 was down in every major category, compared to the same week in 2022.
This is despite inflation sitting at 7 per cent, brick and mortar stores being open, and population growth over the year.
The Reserve Bank implemented yet another rate rise on June 7, pushing the interest rate to 4.1 per cent.
Consumer confidence fell 3.1 percentage points to 72.7 last week, the lowest point since March 2020, during the depth of the pandemic.
Australian Bureau of Statistics data showed discretionary consumption fell 1 per cent in the March quarter.
“Far from a shift from goods to services, the household spending pullback is seen in most categories,” ANZ senior economist Adelaide Timbrell said.
“The end-of-financial-year sales will be key to how ANZ-observed spending ends Q2.
“There is generally a pick-up in spending in the second half of June.
“If this does not occur this year, it will signal even further weakness ahead as households navigate higher interest rates and ongoing inflation.”
Considering the Reserve Bank is widely tipped to implement yet another rate rise in July, Aussie shoppers might be forced to skip the EOFY sales this year.
There remains hope though; according to a Roy Morgan survey, Aussies are tipped to spend $9.3 billion at the end of financial year sales this year, $500 million more than in 2022.