Australian retail sales strengthen in positive sign for holidays
AUSTRALIAN retail sales accelerated in October, marking its third straight month of gains as consumers turn more confident about their finances in anticipation that the next move in interest rates is likely to be a cut.
Sales advanced 0.6 per cent from the prior month, exceeding a forecast 0.4 per cent gain, figures from the Australian Bureau of Statistics (ABS) showed on Monday (Dec 2). The outcome follows a 0.1 per cent increase in September.
“The stronger than usual October month saw some retailers enticing buyers to spend early with discounting, particularly on discretionary items,” said Robert Ewing, ABS head of business statistics. “The rise in discretionary spending was driven by online discounting events while people also spent more on electrical goods, particularly televisions and other audio-visual equipment.”
Retail sales can be an important consideration in policy decisions given consumption accounts for more than half of gross domestic product. The Reserve Bank of Australia (RBA) has repeatedly highlighted the outlook for household spending as a key uncertainty as it has held rates at 4.35 per cent throughout the year.
Monday’s data showed retail sales rose 3.4 per cent from a year earlier, compared with 1.2 per cent in October 2023.
The RBA meets next week, with economists and markets predicting no change to rates until 2025. Governor Michele Bullock recently said inflation was still too high to consider any easing in the near term.
Monday’s retail data also showed:
- Non-food industries had significant rises with household goods retailing up 1.4 per cent
- The bounce back in food retailing is being driven by liquor, climbing 1.7 per cent
- Cafes, restaurants and takeaway food services rose 0.3 per cent, its third straight monthly rise
The ABS intends to cease the publication of retail sales data from mid-2025. It is switching to a more comprehensive monthly report on household consumption that will be released Thursday. BLOOMBERG
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