IN CHARTS: spending stable so far in post-JobKeeper economy

ANZ data show total spending and retail sector spending growth in April were similar to previous years, despite the end of JobKeeper wage subsidies on 28 March.

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The very rapid labour market recovery, as well as high household savings from 2020 and lower interest payments than usual, seem to have translated to resilient household spending amidst the fiscal dry-up.

"Groceries have not matched their elevated 2020 spend…  because there are more options for eating out compared to… last year when lockdown restrictions were in effect.”

While the share of spending going to retail is nowhere near lockdown levels, the share of total spending devoted to retail for the week to 2 May 2021 was 53 per cent – 6 percentage points higher than the comparable period in 2018 and 2019. 

Entertainment, services and travel spending have still not recovered to pre-pandemic levels but most other retail categories have.

Dining growth has been strong and, while groceries have not matched their elevated 2020 spend, this is likely because there are more options for eating out compared with late April and early May last year when lockdown restrictions were in effect.

Shopping spending for the week to May 2, 2021 was very similar to the same time last year but the mix changed with less focus on electronics and more on social categories, including clothing.

Beyond retail, accommodation and petrol station spending are at similar levels to 2019 while entertainment still has some way to go to get back to pre-pandemic levels.

Average salary deposits flat, government support still elevated

ANZ Research used ANZ’s internal bank deposit data to identify and understand how average bank deposit values have changed through the COVID-19 downturn and into 2021. Using aggregated, seasonally adjusted bank deposit data, ANZ Research analysed changes in the average incoming salary and government deposits by location (state)and the age of the primary account holder.

The March quarter showed very modest increases in average salary deposits of 0.1 per cent, the lowest quarterly result since the COVID-19 downturn. Comparison with national accounts data suggests a weak quarter for nominal compensation of employees may be ahead. Average government deposits fell by 3 per cent in the quarter but are still up year-on-year.

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

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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