Consumers unfazed by cash rate hike

Consumers have shrugged off the latest interest rate rise, leaving confidence largely unchanged following the eighth cash rate hike in a row. 

ANZ and Roy Morgan's weekly consumer confidence gauge lifted 0.2 points to 82.9, slightly higher than the 82.6 four-week average.

While the uptick was only marginal, ANZ senior economist Catherine Birch said this was the first increase in the indicator after a cash rate rise.

"This was the first time in the current tightening cycle that confidence has improved after an increase in the policy rate, perhaps a sign that households expect a pause soon," Ms Birch said.

Last Tuesday, the Reserve Bank of Australia hiked interest rates by another 25 basis points, with some experts arguing the central bank has already done enough to calm inflation and is likely to resist more hikes in the new year. 

Confidence amoung mortgage holders did drop 1.3 points, whereas homeowner confidence lifted by 1.3 points and renters by 0.2 points.

The "time to buy a major household item" survey question sunk by 6.8 points to a four-week low, which Ms Birch said could be a sign of a spending slowdown. 

CommBank's household spending intentions index revealed a softer-than-usual Black Friday boost.

The 6.4 per cent jump in retail spending measured by the index was lower than normal, suggesting consumers are starting to respond to rising interest rates and higher prices.

The index, which draws on Commonwealth Bank payments data and Google Trends search data, lifted by a modest 1.9 per cent overall for the month, representing a slowdown in the pace of growth.

"The index's narrow rise in November could be something of a 'last hurrah', with underlying spending trends showing household are hesitant to spend too much as interest rate hikes flow through in increased bills and higher prices," CommBank chief economist Stephen Halmarick said.

Transport spending lurched 6.5 per cent over the four weeks, largely due to elevated petrol prices, particularly in early November.

Health and fitness also saw strong gains, lifting five per cent for the month of November.

Home buying also rose 3.9 per cent - but is down 24.8 per cent for the year - and utilities surged by 1.4 per cent.

Travel dragged the indicator down, losing 6.6 per cent for the month (but is up 14.2 per cent annually) along with entertaining, which was down 4.4 per cent.

"With the Reserve Bank of Australia having increased interest rates by 300 basis points in 2022, household budgets will become more constrained into the new year, putting further downward pressure on spending," Mr Halmarick said.

NAB is also due to release its business survey and the Australian Bureau of Statistics will unveil overseas arrivals and departures and business turnover data.