A Westpac report released on October 28th showed that the bank card spending index was 160.6 for the week ending October 17th, representing a 1.9% increase in the third quarter and a 6% year-on-year increase. The latest weekly data translates to a quarterly growth rate of 2.1%, approaching the robust levels seen in late 2024 and early 2025. However, consumption growth showed a clear divergence: rising fuel prices boosted spending on necessities, while spending on optional services such as dining and travel continued to grow. However, spending on optional goods such as clothing and home furnishings remained weak, declining by 0.1% quarter-on-quarter in the third quarter, with a more pronounced drop on a per capita basis. Australian petrol prices have risen from AU$1.56 per liter at the end of June to over AU$2.40 recently. Westpac estimates that nominal bank card spending increased by 1.9% in the third quarter, and after adjusting for the projected 1.1% inflation rate, the real increase was approximately 0.8%. This indicates that overall consumption remains resilient, but high fuel prices are squeezing household spending on non-essential goods.
