Retail sales fail to meet predictions
AUSTRALIAN retail sales fizzled out in July while nationwide home prices fell again in August and a measure of job advertisement eased, suggesting a further dent in consumer confidence and spending.
Yesterday’s figures from the Australian Bureau of Statistics showed retail sales for July were flat, the weakest result since March.
That lagged expectations of 0.3 per cent growth and followed a 0.4 per cent rise in June.
Clothing and footwear led declines with a two per cent fall while sales at department stores eased 1.9 per cent and household goods retailing faltered 1.2 per cent.
The drops were offset by gains in food, cafes and restaurants – a category that has remained resilient over the past year or so.
The downbeat data briefly weighed on the Australian dollar which slipped to 71.66 US cents, the lowest since early 2017.
The disappointing sales come as economists worry about the impact on household consumption from snail-paced wage growth and a slowdown in Australia’s once-booming housing market.
Data out earlier in the day showed Australian job advertisements eased in August and were no longer pointing to a further decline in the unemployment rate.
Separate figures showed home prices fell for the 11th straight month in August as banks tighten lending standards amid damaging revelations of some of their business practices.
Lending growth is at its weakest in more than four years while measures of consumer confidence have remained subdued for more than a year now.
All of this means the Reserve Bank of Australia will stay on its steady policy path as it awaits a pick-up in inflation and economic growth.
The central bank is all but certain to keep rates at a record low 1.5 per cent at its monthly policy meeting today.
Separate data from the ABS on company earnings showed gross operating profits rose two per cent in the June quarter, the third straight quarter of solid gains that left profits up more than 11 per cent on a year earlier. There was also better news on household incomes.
Firms paid out $137 billion in wages and salaries in the June quarter, up 1.2 per cent on the previous quarter. The wage bill rose 4.5 per cent annually, more than double individual pay growth as employers take on more workers.
Australia’s GDP data is due tomorrow and a Reuters poll of 16 economists show the $1.8 trillion economy likely expanded at 0.7 per cent last quarter, slower than the brisk pace of 1.0 per cent in the three-month ended March.
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