Output and methodological updates to the Monthly Household Spending Indicator

This paper describes the new outputs from the Monthly Household Spending Indicator.

Released

12/07/2022

Source

Monthly Household Spending Indicator, May 2022

Introduction

The experimental Monthly Household Spending Indicator was first published in February 2022.

The indicator is a monthly measure of change in household spending on goods and services. Its primary purpose is to provide users with timely insights into changes in consumer spending.

The indicator uses banks transactions data to derive an index of household spending. It measures 9 of the 13 Classification of Individual Consumption by Purpose (COICOP) top level categories of household consumption [1]. Data is only currently available in calendar adjusted and original terms. Data is available at a state and territory by COICOP level.

A seasonally adjusted series is not currently available.

Feedback on the methodologies and the experimental estimates published in this paper is welcomed by email to national.accounts@abs.gov.au.

Footnote

Approach

In line with its current experimental status, the Australian Bureau of Statistics (ABS) continues to review the performance of the indicator and will make improvements where possible. The ABS appreciates the feedback received from a range of stakeholders following the first release of the indicator.

This information paper discusses three improvements being made from the May 2022 release onwards:

Four additional analytical series
Improvements to the indicator release date
Targeted changes to the underlying methodology.

Additional analytical series

From May 2022, four new analytical series will be included in the monthly publication:

Goods
Services
Non-discretionary consumption
Discretionary consumption.

The new series are designed to complement the similar analytical series of Household Final Consumption Expenditure published in Australian National Accounts: National Income, Expenditure and Product. Information on the classifications is shown in Table 1.

The scope of the indicator excludes several categories of non-discretionary spending – rent and other dwelling services, education services, communications and electricity, gas and other fuels. The exclusion of these categories drives the difference between the HFCE and indicator series for non-discretionary spending.

Table 1: HFCE division categories and subcategories taxonomy
HFCE Division Categories	Goods / Services	Discretionary / Non-discretionary
Food	Goods	Non-discretionary
Alcoholic beverages and tobacco	Goods	Discretionary
Clothing and footwear	Goods	Discretionary
Furnishings and household equipment	Goods Household appliances and tools Furniture, floor coverings and household goods	Discretionary Household appliances and tools Furniture, floor coverings and household goods
Health	Services	Non-discretionary
Transport	Services Purchase and operation of vehicles Transport services	Non-discretionary Purchase and operation of vehicles Transport services
Recreation and culture	Goods Newspapers, books and stationery All goods for recreation and culture Services Recreation and cultural services	Discretionary Newspapers, books and stationery All goods for recreation and culture Recreation and cultural services
Hotels, cafes and restaurants	Services Catering services Accommodation services	Non-discretionary Catering services Discretionary Accommodation services
Miscellaneous goods and services	Goods Other goods Services Other services	Discretionary Other goods Other services

This table shows information about how each of the HFCE division categories and subcategories are classified into Goods/Services and Discretionary/Non-discretionary spending.

Release date changes

The indicator was first published around eight weeks following the reference month. This was reduced to seven weeks from the April reference month and will reduce to around six weeks from the June reference month. Due to delays in availability of data from the banks during January, the indicator for the December reference month will only be available eight weeks after the reference period.

Underlying methodology changes

The indicator uses a quarterly benchmarking process, where the indicator movements are benchmarked to their corresponding quarterly HFCE series. Benchmarking to quarterly HFCE is used to adjust for coverage error that occurs from only having a sample of consumer bank transactions.

The benchmarking process is undertaken in the month following the release of the quarterly national accounts, meaning that there are no more than three unbenchmarked months in any one indicator release.

This methodology was described in the Information Paper Development of the new experimental monthly household spending indicator.

Changes to the benchmarking process have been made to allow the ABS to produce the additional four analytical series described in this paper. Previously benchmarking was applied at the state by COICOP division level. Where a COICOP division splits between good and services, or discretionary or and non-discretionary spending, the benchmarking to HFCE is now applied at either the COICOP by state by goods/services, or COICOP by state by discretionary / non-discretionary level.

This change will result in a small number of revisions to the indicator time series.

APA

Citation