Overview

• Consumer spending declined slightly in December, falling 0.3%, although there were small upwards revisions to October and November (+0.2 and 0.3ppts respectively). Falls in retail and vehicle & fuel spending more than offset a rise in other spending while spending on essential services was little changed.
• Retail spending fell 0.9%, with a small fall in hospitality (-0.2% m/m) and a larger decline in goods retail (‑1.1%) with the latter perhaps reflecting changes in seasonality.
• Business credits fell 0.4% in December. Credits are up 10.9% from a year ago but have flattened out since mid-22, with no growth in the December quarter.

Comments from NAB Chief Economist Alan Oster

“Our monthly transaction data indicates that spending softened in December after a solid rise in November, largely driven by weakness in retail goods and spending on fuel, while discretionary spending showed some strength.”

“The fall-off in retail may reflect changes in seasonal spending patterns, with Black Friday and early Christmas shopping potentially bringing spending forward from December. Putting aside the month-to-month volatility, retail spending appears to have levelled off in recent months.”

“While total spending was up 1.6% in the December quarter, this is the slowest quarterly growth rate this year, and growth in volumes is likely to be lower given still high inflation.”

For further details please see NAB Monthly Data Insights (December 2022)