Spending survives fiscal cliff. For now…

There isn’t any evidence from the data the reductions in JobKeeper and JobSeeker are hitting spending - yet. This is the key risk to spending in the short term. On the upside, spending data in Victoria suggest some pent-up demand could give spending a boost once restrictions in Melbourne ease.

"Social distancing hasn’t stopped people from sharing the love. Personal postage spending was up 22 per cent year-on-year for the week to 10 October.”

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Spending less on clothes or paying later? For the week to October 10, ANZ-observed spending on clothing (−12 per cent year-on-year) and beauty services (−6 per cent year-on-year) were still lower than last year but spending growth on payment gateways, including Buy Now Pay Later, and secure third-party portals was up 38 per cent year-on-year. 

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We are slowing down on home upgrades. Furniture is up 16 per cent year-on-year for the week to October 10, down from +65 per cent year-on-year at its mid-May peak. Trade services grew 23 per cent year-on-year, down from a +130 per cent year-on-year peak in late April. Hardware grew 18 per cent year-on-year.

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The focus on technology has moved from hardware to software. Electronics spending is below pre-pandemic growth at +5 per cent year-on-year and office retailer is barely growing (+6 per cent year-on-year). Meanwhile, software spending is up 21 per cent year-on-year and miscellaneous entertainment including streaming is growing stronger than pre-pandemic (+10 per cent year-on-year).

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Social distancing hasn’t stopped people from sharing the love. Personal postage spending was up 22 per cent year-on-year for the week to 10 October and had a Father’s Day spike in early September (46 per cent year-on-year for the week to 6 September).

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Spending at pet stores (including pet supply stores) was up 35 per cent year-on-year and pet services growth (+45 per cent year-on-year) has also accelerated over recent months.

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Accommodation (−26 per cent year-on-year) and dining/takeaway (−5 per cent) spending have both been trending up over the last couple of months and entertainment venue spending (−48 per cent year-on-year) improved across September from its July and August stagnation. Cinemas are still struggling (−78 per cent year-on-year).

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Retail growth (+6 per cent year-on-year) has looked steady since early September but weak spending in Victoria across shopping (−31 per cent year-on-year) and dining/takeaway (−52 per cent year-on-year) suggests potential for a lift once restrictions in Melbourne ease.

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Adelaide Timbrell is Economist and David Plank is Head of Australian Economics at ANZ