Father's Day socks and jocks spree boosts August spend

Australians managed to find room in the family budget to shower dads with gifts on Father’s Day despite ongoing financial pressures.

More money was funnelled into hardware stores and men’s clothing outlets last month, pushing household goods spending a solid 4.4 per cent higher in the month of August.

Spending on presents as well as meals and drinks out nudged Commonwealth Bank’s household spending insights index up 1.8 per cent over the month.

CBA chief economist Stephen Halmarick chalked up the spending boost in August to the early timing of Father’s Day but said households and the broader economy were still under pressure.

“An early Father’s Day boosted spending in August as consumers appear to have lifted spend on household goods, while hospitality venues also saw people open their wallets during the month,” he said.

“The last time Father’s Day fell so early in the year spending retreated in September, which is worth keeping in mind as the annual spending rate still suggests a relatively weak consumer.”

For the year, spending remains subdued at only 3.7 per cent.

The bank expects the Reserve Bank to cut interest rates later this year, a departure from the remaining three big banks tipping a 2025 start.

CBA expects inflation to moderate faster and the labour market to loosen more than the central bank thinks, hence the earlier start to cuts.

“However, there is a possibility of delays pushing this into early 2025,” Mr Halmarick said.

Thursday’s spending indicator also captured the early impacts of government power bill rebates, with utilities spending down 0.3 per cent.

“For the first time in August we saw the impact of the various government electricity rebates on wallets which can be seen by the decreased spending on utilities,” Mr Halmarick said.

“This, coupled with increased education spend, impacted spending across home ownership categories as we saw a jump in spending by renters likely due to university fees, while outright owners benefited from reduced spend on utilities as this is typically a larger share of their wallet.”

The CBA survey of about seven million customers revealed university and school fees paid in August led to a jump in spending on education (up 3.6 per cent).

Categories that also posted a lift in spending were food and beverage (up 1.2 per cent), household services (up 1.8 per cent) and motor vehicles (up 1.4 per cent).