Overview

• Consumer spending declined in March after softening in February. The decline was fairly consistent across spending categories, with both goods and services spending declining. This marked the first significant monthly decline in services spending since the Omicron wave in January 2022.
• Discretionary spending declined noticeably in the month, while non-discretionary spending only edged down slightly. Over the three months of Q1, total nominal spending was 2% higher than Q4 of 2022.
• Business credits rose 0.7% in March (or 1.1% excluding mining and agriculture). Credits are up 6.8% from a year ago but have grown only slightly over recent months.

Comments from NAB Chief Economist Alan Oster

“Our monthly transaction data suggests spending turned a corner in March with total spending declining (in seasonally adjusted terms) after holding up through more than a year of high inflation and rising interest rates.”

“The long period of rebalancing between goods and services spending looks to have run its course with both categories declining – the first significant monthly decline in services spending since the Omicron wave in January 2022.”

“In total, nominal consumer spending was up 2% over the course of Q1. Given that inflation is still high, this suggests another quarter of modest real consumption growth is likely when national accounts data become available.”

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