Australia: Surprisingly strong sales in February shake off the shadow of further economic slowdown in Q1
Nominal retail sales in February jumped 0.8% over the previous month in seasonally-adjusted terms, following January’s anemic 0.1% uptick and marking the strongest expansion in over a year. This was well above market expectations of a mild 0.2% increase. Consumers showed remarkable resilience against a backdrop of unremarkable wage growth, falling house prices and a heavy stock of household debt, most likely benefiting from a tight labor market. February’s data bodes well for the performance of the economy in Q1, lowering concerns of a further deterioration following a sharp slowdown in GDP growth in H2 2018.
The positive showing came on the back of surging sales in department stores; strong sales of household goods, clothing, footwear and personal accessory; and a healthy expansion in food retailing. Meanwhile, sales in cafes, restaurants and takeaway services as well as other retailing were flat.
In annual terms, retail sales expanded 3.2% in February, marginally down from January’s 3.3% increase. Meanwhile, annual average growth in retail sales inched up to 3.1% from January’s 3.0%.