Household spending declined in September for the first time since the RBA started hiking interest rates in May, a concrete sign of household pressures begin to hit.

The Commonwealth Bank Household Spending Intentions Index fell 0.5 per cent to 114.9 in September, dropping from August’s 115.5.

“The fall in September was the first monthly decline since April this year and is clearly beginning to show the effects on the household sector of the RBA’s aggressive interest rate hiking cycle – with further impact expected in the months ahead,” the bank reported.

“It is important to remember this is in nominal dollars. With prices rising the real spending will be even weaker.”

The HSI index combines internally generated CBA spending and lending data of its over 16 million customers, with publicly available Google trends search data to show both current spending patterns and spending intentions.

In addition, ANZ-Roy Morgan Consumer Confidence fell 0.9 points (1.1 per cent) to 84.6 this week, now sitting at 21 points under the same week a year ago.

As ANZ Head of Australian Economics, David Plank, points out, this is despite the smaller-than-expected 25 basis point rate hike, and marks a much larger decline than the 0.5 per cent drop following September’s 50 basis point rate increase.

At the moment, 45 per cent of respondents believe now is a bad time to buy a major household item.

In addition, Consumer Confidence is now 5.9pts below the 2022 weekly average of 90.5.