The CommBank Household Spending Intentions Index rose by 0.8% in August to 115.5.

The data shows the modest gain was driven by higher spending on health and fitness, home buying, motor vehicles, and household services sectors. 

A strong rise in motor vehicles spending (13.3%) this month indicates there may be some easing in international supply chain constraints.

Despite the recent RBA hikes, the home buying index rose 10% in August after two previous months of decline.

However, the report notes there are significant lags between an RBA rate hike and when higher mortgage repayments hit household budgets.

“While the index rose in August, we’re seeing weakness in discretionary spending following recent interest rate increases and a growing move to value purchasing,” said Stephen Halmarick, CBA chief economist.

“For instance, while grocery spending remains high, we’re hearing customers are swapping to value products in response to higher food prices.

“Spending for household services has also risen 4% in August, with charitable donations leading the category, likely signalling a stressful environment for many in the community.”

Gareth Aird, CBA's head of Australian economics, previously said there's typically a three-month lag time between interest rate rises and when consumers actually rein-in spending.

Spending Category Monthly change % Yearly change %
Motor Vehicle +13.3% -5.8%
Home buying +10.0% -23.6%
Health and fitness +7.2% +4.6%
Household services +4.0% +40.1%
Utilities +1.0% +1.6%
Education +0.8% +9.2%
Communications and digital streaming -0.3% -4.6%
Insurance costs -1.0% +2.0%
Retail -1.3% +14.4%
Travel -3.9% +141.2%
Transport -4.0% +140.1%
Entertainment -7.2% +23.3%

Source: CBA

In contrast, sectors like travel, entertainment, transport, and retail all recorded declines in August. 

Entertainment spending dropped by -7.2%, following a strong gain in the previous month (9%) due to school holidays.

According to Mr Halmarick, the decline is consistent with the view that higher interest rates will impact discretionary spending by households for the time being.


Advertisement

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Update resultsUpdate
BankSavings AccountBase Interest Rate Max Interest Rate Total Interest Earned Introductory Term Minimum Amount Maximum Amount Minimum Monthly Deposit Minimum Opening Deposit ATM Access Joint Application TagsFeaturesLinkComparePromoted ProductDisclosure
5.00% p.a.
5.35% p.a.
Intro rate for 4 months
then 5.00% p.a.
$1,036
4 months
$0
$249,999
$0
$0
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure
4.70% p.a.
5.40% p.a.
Intro rate for 4 months
then 4.70% p.a.
$998
4 months
$250,000
$99,999,999
$0
$0
  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
0.00% p.a.
Bonus rate of 5.50%
Rate varies on savings amount.
5.50% p.a.
$1,128
$0
$99,999
$0
$0
  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • No monthly or international fees on any of your transactions.
Disclosure
1.00% p.a.
Bonus rate of 4.20%
Rate varies on savings amount.
5.20% p.a.
$1,065
$0
$99,999,999
$1,000
$0
  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
0.55% p.a.
Bonus rate of 4.95%
Rate varies on savings amount.
5.50% p.a.
$1,128
$0
$99,999
$1,000
$0
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions. Grow your savings balance each month
Disclosure
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Image by Shaun from Pixabay





Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy