Squeeze on all over the economy

Westpac’s first Retail Spending Pulse analysing spending on customers’ credit and debit cards shows nominal spending in the three months to November was up just 3% compared to the same time last year. That is a sharp slowdown from the first half of the year when spending had been rising at an annual rate of about 9%.

As retail prices have increased by about 4% and the population by more than 2%, these spending trends imply weak per-capita spending, Westpac says.

Households are splashing out more cash but getting fewer goods in their shopping baskets. The slowdown is most notable in discretionary items.

This follows trends in the broader economy this year where households have increasingly focused on value for money.