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

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.

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