Household spending plunges in February despite bump from Taylor Swift’s sold-out Eras Tour

Popstar Taylor Swift’s Eras Tour has failed to boost overall consumer spending in Australia as households battle with elevated cost-of-living pressures.

Destination NSW — the peak body of the State — estimated more than 100,000 fans visited Sydney for Swift’s four shows and spent more than $80 million, while City of Melbourne Lord Mayor Sally Capp projected a boost of $86m to the city from the Eras Tour.

Commonwealth Bank on Thursday revealed its latest monthly household spending insights index — which tracks about seven million customers — fell 0.3 per cent in February to 141.6. This was led by declines in household goods and transport, as consumer spending continues to soften.

It said Australians were still prioritising experiences, with a 0.7 per cent rise in the hospitality category, fuelled by a 76 per cent jump in spending at music festivals.

A 115 per cent surge in spending at function and event centres drove the recreation category up 0.5 per cent, as Swift and other musicians like Blink-182 and Pink toured the country in February.

But these increases were not enough to offset spending decreases in seven of CommBank’s spending categories, led by falls in household goods (down 1.9 per cent) and transport (down 1.6 per cent).

These declines were partially offset by increases in spending across utilities (up 0.8 per cent) and health (up 0.6 per cent).

CBA chief economist Stephen Halmarick said the fall in February continued the volatility seen in household spending over the summer months and reflected the ongoing softening of consumer spending.

“February was a big month for concerts and big social events in Australia and consumers clearly prioritised tickets to see their favourite artists like Taylor Swift, with spending up on musical festivals, as well as spending on flights and hospitality venues, likely associated with the headline concerts,” he said.

“However, the jump in hospitality and recreation spending wasn’t enough to offset weakness across seven of the 12 categories of the Index, which paints a picture of consumers cutting back.”

Queensland was the only State to post an increase in spending, with the largest falls recorded in the Northern Territory (down 3.2 per cent), the ACT (down 2 per cent) and Victoria (down 0.8 per cent).

“We expect to see continued softening of household spending in the near term as the November 2023 interest rate hike takes hold, which together with decelerating inflation supports our view that the RBA can commence official interest rate cuts in September this year,” Mr Halmarick said.

The CBA data came the same day National Australia Bank revealed its transaction data was up 0.1 per cent month-on-month in February. Discretionary spending declined slightly, while non-discretionary spending rose in the month.

“Our monthly transaction data suggest spending was more subdued in February after a reasonably strong pickup to start the year in January,” NAB chief economist Alan Oster said.