Overview

• Consumer spending, according to NAB’s transaction data, rose in May, but only partially reversed the fall over March and April. The increased spending was mainly on services, including hospitality, construction, and arts, recreation & travel.
• Discretionary spending rose in the month, while non-discretionary fell slightly. However, over the last three months (compared to the previous three months) discretionary spending has fallen with non-discretionary growing solidly.
• Business credits fell 0.1% m/m in May, but there was a 0.3% increase when excluding mining and agriculture. Credits have broadly tracked sideways so far this year but with considerable divergence by sector.

Comments from NAB Chief Economist Alan Oster

“Our monthly transaction data showed a small rise in spending in May (in seasonally adjusted terms), driven by discretionary spending.”

“However, this only partially reverses declines in the previous two months, and so does not change our view that consumer spending growth is softening.”

“Our consumer transaction data is a nominal measure and, with inflation still elevated, points to even weaker volume growth.”

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