NAB Economics Data Insights – week ending 15 January 2022
While spending has softened, it is nowhere near as bad as some have reported and we had feared.
In this podcast, NAB Chief Economist, Alan Oster gives you a 10 minute summary of our analysis of consumer spending.
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NAB Chief Economist, Alan Oster commented
- In our first update for 2022, we had anticipated our latest consumer data would be hit badly by omicron. While spending has softened, it is nowhere near as bad as some have reported and we had feared. While there is weakness in hospitality, and retail has gone sideways, it is not at lockdown levels and can somewhat be attributed to seasonality. That said, there are clear signs of changed consumer behaviour and only Western Australia (which has very few cases) has enjoyed a big post-new year rebound.
- Overall, our consumption series stood at 131.0 for the week ending 15 January 2022, using a 2019 base. This was an improvement from the week prior (130.7), and above its level a year ago (125.9). There are, however, some tentative signs that retail and hospitality spending are moving in different directions. Retail stood at 135.3 last week, a lower than the week prior (140.3) but above the same time in 2021 (130). Hospitality however stood at 103.5, down on the week prior and below the same time in 2021 (108.7).
- There is some uncertainty as to how clear this signal is – using a 4-week moving average gives a better result for hospitality. But given sharply lower movement across capital cities in response to omicron, it seems reasonable to assume that the weakness in hospitality is virus-related. Covid cases are probably peaking in some states, but it is unclear whether this will continue and how consumers will respond in 2022.
- Our inward credits data was weak in the first two weeks of the new year, but showed above average strength in late December 2021 In short, the inward credits data show no clear signals regarding the impact of omicron so far, but will continue to monitor how these trends in 2022.
For further details please see NAB data insights (week ending 15 Jan 2022)