Spending in retail has considerably improved since monetary policy eased in November and as large parts of the economy reopened, according to the latest CBA Household Spending Intensions report.
The month of November showed spending growth across clothing and footwear, household furnishings and equipment, personal care and recreational retail.
“The growth in spending intentions in a number of key sectors indicates that the economic recovery is well underway,” said CBA chief economist Stephen Halmarick.
“The signs for December are also looking good, based on our weekly credit and debit card spend data.”
And, based on the data CBA has collected, it is expecting Australia to see one of the shallowest recessions of all major economies in 2020, with total economic contraction for 2020 limited at -2.8 per cent.
The report also saw spending intentions increase for home buying, motor vehicles, and entertainment, while travel spend remained flat, and education and health and fitness fell.
The growth seen in select spending categories, combined with other economic indicators, means the Australian economy is on track to head into 2021 on firm footing, according to Halmarick, who said the bank has an “above-consensus expectation” for growth in 2021 at 4.2 per cent.