Is inflation starting to bite financially precarious Australians?New research explores how Australi

Although consumption The analysis uses data from 2,670 respondents of increased, the strong demand was not fully matched the Taking the Pulse of the Nation (TTPN) survey, by supply, causing a surge in inflation since the end a weekly survey representative of the Australian of 20211. [...] In April and October 2022, TTPN (RBA) rose interest rates from a record low 0.1% asked all respondents about changes in their current in May to 3.35% in February 2023, with more hikes levels of spending compared to the prior year and expected in the months ahead (RBA statement how they expect their spending will change in the February 2023). [...] BOX 1: MEASUREMENT OF RESPONDENTS’ CHANGES IN THE CURRENT LEVEL OF i SPENDING AND EXPECTED CHANGES IN SPENDING IN THE NEXT SIX MONTHS In April and October of 2022, the Taking the Pulse of the Nation (TTPN) survey asked respondents to answer consider total spending and spending on the following 7 items: Essential items (non-discretionary) Non-essential items (discretionary) • Groceries and takeaway. [...] Most of those in a financially precarious situation expect additional increases in essential spending in the months ahead Table 1 documents that spending on essential items is the major driver for the increases in total spending. [...] As shown in Table 2, in October more than 70% of financially precarious Australians expected an increase in spending on utilities and transportation in the next 6 months, 65% expected a rise in spending on grocery and 60% in rent and mortgage payments.