Overview

• Consumer spending rose 1.7% in January, more than reversing the small fall seen in December. Spending rose across every major category, with notable increases in retail, ‘other’ spending, and vehicles & fuel. Total spending was 1.8% higher over the past three months.
• Retail spending rose 2.0%, with increases in both goods retail (up 1.9%) and hospitality (2.3%). The pickup followed a soft December reading as seasonal spending shifted earlier into November.
• Business credits rose 0.3% in January. Credits are up 9.4% from a year ago but have flattened out in level terms since mid-2022, with credits down 0.2% over the past three months.

Comments from NAB Chief Economist Alan Oster

“Our monthly transaction data indicates that spending picked back up in January after a small fall in December, with strength across most spending categories.”

“The pick-up in January suggests that the softness seen in December was primarily the result of changing seasonal patterns with Christmas spending moving earlier into November to take advantage of Black Friday sales. Underlying spending behaviour appears to have remained fairly robust.”

“Strong inflation continues to affect nominal spending measures, and ABS data has shown that retail spending fell slightly in Q4 2022 in real terms. Price increases also likely contributed to the January rise but it is difficult to say by how much. Regardless, these results suggest consumers remained resilient through the first month of 2023.”

For further details please see NAB Monthly Data Insights (January 2023)