Australia: Retail sales continue to grow in May
Nominal retail sales growth in May came in at 0.4% over the previous month in seasonally-adjusted terms, marginally below April’s revised 0.5% expansion (previously reported: +0.4% month-on-month seasonally-adjusted) and coming above market expectations of a more moderate 0.3% rise. Two consecutive months of relatively healthy growth in retail sales bodes well for consumer spending, which was only a minor contributor to growth in the first quarter. Much higher sales in clothing, footwear and personal accessories retailing and in department stores, and somewhat higher sales in food and household goods retailing more than offset lower sales in cafes, restaurants and takeaway food services.
That said, moderate wage growth, high levels of household debt, higher oil prices and a slackening housing market will likely restrain the extent of the strengthening of private consumption. In annual terms, retail sales jumped 3.3% in May, well above April’s 1.2%. However, growth in annual average retail sales inched down to 2.6% in May from 2.7% in April.