Australian retail sales surge on iPhone, Black Friday bonanza

[SYDNEY] Australian retail sales boasted the biggest monthly rise in four years in November as consumers splashed out on Apple iPhones and Black Friday promotions, a major boost for an economy that had been struggling with sluggish spending.

The Australian dollar jumped a third of a US cent to US$0.7874 as the surprising strength helped counter concerns consumers had lapsed into a near-permanent depression.

Thursday's figures from the Australian Bureau of Statistics (ABS) showed retail sales jumped 1.2 per cent in November from October, when they rose a solid 0.5 per cent. That was three times the market forecast and the steepest gain since early 2013.

Sales were up 2.9 per cent on a year earlier at a record seasonally adjusted high of A$26.38 billion (S$27.57 billion). Gains were led by a hefty 4.5 per cent rise in household goods and a 2.2 per cent increase for other retailing.

"Seasonally adjusted sales in both these industries are influenced by the release of the iPhone X and the increasing popularity of promotions in November, including Black Friday sales," the ABS said in a note.

Consumer spending has been under pressure from record-high household debt and sluggish wage growth, one reason the Reserve Bank of Australia is in no rush to raise interest rates from record lows.

Futures markets still imply around a 50-50 chance of a hike by September and are not fully priced for a rise from 1.5 per cent until February next year.

The marked revival in sales in October and November greatly improved the outlook for gross domestic product growth in the fourth quarter, given household spending accounts for around 57 per cent of annual economic output.

Household consumption had expanded at its slowest pace since 2008 in the third quarter, marring an otherwise respectable annual growth outcome of 2.8 per cent.

The retail series also understates spending to some extent since it does not yet include online sales, which have been growing much quicker than bricks and mortar.

The ABS is working on an experimental measure that showed online sales surged 22 per cent in original terms in November to A$1.51 billion.

National Australia Bank (NAB) produces an online measure of its own that showed a sharp 4.7 per cent rebound in sales in November, the fastest pace since late 2014.

In all, NAB estimates consumers spent A$24 billion online in the year to November, with annual growth running atop 14 per cent.

That total is only set to grow because Amazon set up shop late last year and is rapidly expanding its offerings.

Anecdotal evidence from traditional retailers still suggest they had a better December holiday season than first feared, while surveys found a marked brightening in the consumer mood.

A survey from ANZ and Roy Morgan out this week showed confidence had improved to the best since late 2013. Notably, those saying they were "better off" financially picked up to 35 per cent, helping offset concerns about slow wages growth.

REUTERS