Household spending defies global uncertainty in March

Going forward we will be seasonally adjusting data (see note the in right margin), since we now have sufficient observations post-Covid to do so. This also allows us to adjust for trading days and timing of holidays such as Easter. Note that we have rearranged the charts, so the seasonally adjusted levels are presented first.

Adjusting for seasonality, spending looked much stronger than y/y growth rates suggest, rising 1.7% m/m in real terms compared to February. This indicates that the upward trend in spending is holding up despite rising uncertainty and declining consumer confidence. Y/y spending is being dragged down by the fact that Easter (and the strong shopping days leading up to it), fell in March last year, compared to April this year.

We are seeing different trends across retailing, with grocery spending continuing to be depressed by high food prices, albeit with no further deterioration in March. Cosmetics spending remains high but seems to have lost some steam in recent months. Several other categories have seen slight improvements in March.

Spending on theatres, concerts and cinemas weakened in March, the latter has been declining consistently since late last year. In real terms, restaurant spending has been largely flat for the past six months, and we are yet to see a pickup in travel spending.

Overall, we are still seeing real spending growth, supported by real income gains and a strong housing and labour market. Uncertainty is likely going to cause some headwinds, but Danish household finances should be strong enough to counter this.

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