Australia’s economy is experiencing another “very soft quarter” of growth, all but ruling out another interest rate rise by the Reserve Bank despite inflation easing at a slower pace, said Steven Halmarick, CBA’s chief economist.

CommBank’s household spending index, which is based on the outlays of about seven million CBA customers, fell 0.3% in February to 141.6 points. The tally was lower than in November, indicating spending over summer shrank.

The decline last month came despite a splurge on concerts, including seven by US star Taylor Swift. Spending at music festivals was up 76% from January, while transactions at function and event centres, such as on merchandise, leapt 115%.

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“[T]he 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,” Halmarick said.

Queensland was the only state to report an increase in spending in February 2024 – despite not hosting a Swift concert. From a year earlier, national spending was up 3.5%, or roughly in line with inflation.

Halmarick said the November interest rate rise by the Reserve Bank started to take effect for many borrowers last month. “It’s going to be another very soft quarter [for GDP growth], which combined with the deceleration in inflation makes us increasingly confident that the RBA rate hikes are done and the next move is down.”

The RBA board meets for a second time in 2024 next Monday and Tuesday. Financial markets were rating a 25 basis-point cut in the cash rate to 4.1% as about a one-in-10 chance. CBA continues to pencil the first rate cut to land in September.

Australia’s economy expanded 0.2% in the December quarter, slowing from 0.3% in the previous three months, the Australian Bureau of Statistics said last week.

A similar pace can be expected for the first half of 2024, Halmarick said, adding the RBA would likely wait until it got the March quarter inflation figures – scheduled for release on 24 April – before deciding whether to remove its tightening bias or not.

The treasurer, Jim Chalmers, said last week the latest GDP figures showed “the balance of risks in our economy is shifting from inflation to growth”, stoking expectations the federal budget to be released on 14 May will include extra spending measures.

Chalmers received an indirect endorsement of his performance from his predecessor, Josh Frydenberg, at an AFR business summit in Sydney on Tuesday.

Some households were “hurting, no doubt” given the many interest rate rises and the cost of living. The RBA, though, had likely hit peak interest rates and inflation was heading down, Frydenberg, now chair of the local operations of Goldman Sachs, said.

Unemployment might tick up but “it’s still relatively low”, he said. “Overall, I think the economy is in pretty good shape.”

NAB’s monthly business survey, out on Tuesday, also showed the economy was remaining “resilient” as conditions improved last month to be back above the long-run average.

“[I]t is really too early to say if this is just a temporary lift or the beginning of a more meaningful turnaround,” Alan Oster, NAB’s chief economist, said.

“Conditions look very robust in some of the services sectors such as transport, recreation and personal services, finance, business and property,” Oster said. “On the other hand, retail and construction both look fairly weak, which reflects direct exposure to the high level of interest rates.”

One asset that has withstood higher interest rates has been housing. The value of the nation’s dwellings rose almost 2% – or $196.8bn – in the final three months of 2023, to just shy of $10.4tn, the Australian Bureau of Statistics said on Tuesday.

All states and territories saw a pickup in values, with NSW dwellings worth almost $1.2m on average.

By contrast, those in Victoria came in at $895,000 on average, with those in all regions except the ACT lower still, underscoring the relatively high housing cost pressures in Sydney and elsewhere in NSW.