Australia: Consumers close Q2 on a more positive note
August 2, 2019
Nominal retail sales in June rose a healthy 0.4% over the previous month in seasonally-adjusted terms, accelerating from May’s subdued 0.1% uptick. This beat market expectations of a 0.3% increase. June’s reading suggests consumer spending if starting to benefit from the recent decline in mortgage rates, as well as from the bottoming out of the country’s house prices. That said, household spending remains on the watch list of Australia’s policymakers, due to protracted modest wage growth and high levels of debt.
June’s increase came on the back of higher sales in clothing, footwear and personal accessory retailing; other retailing; cafes, restaurants and takeaway services; food retailing; and household goods retailing. Meanwhile, sales in department stores decreased.
In annual terms, retail sales expanded 1.9% in June, notably down from May’s 2.9% increase. Meanwhile, annual average growth in retail sales was stable at May’s 3.0%.
With June’s data, retail sales expanded a mere 0.2% in inflation-adjusted terms over the previous quarter, suggesting the contribution to growth of private consumption was quite modest in the second quarter.