Australia retail sales rebound after fall, annual rate slows further
SYDNEY (Reuters) — Australian retail sales rebounded in July after a sharp fall the previous month, but the annual rate slowed further, a result that should not upset the outlook for interest rates as high borrowing costs work to slow consumer spending.
Data from the Australian Bureau of Statistics (ABS) on Monday showed nominal retail sales rose 0.5% in July from June. Analysts had looked for a rise of 0.3% after a tumble of 0.8% in June.
Sales of A$35.4 billion ($22.8 billion) were up 2.1% from a year earlier, the lowest since August 2021, and a world away from post-lockdown boom levels of 19% in mid-2022.
Ben Dorber, ABS head of retail statistics, said the rebound was boosted by additional spending at catering and takeaway food outlets linked to the 2023 FIFA Women’s World Cup and school holidays.
«While there was a rise in July, underlying growth in retail turnover remained subdued,» he said.
The sluggish trend in consumer spending is a major reason that the Reserve Bank of Australia paused its rate hikes for two straight months after jacking up rates by 400 basis points since May last year to an 11-year high of 4.1%.
Markets are still confident the RBA will stand pat next month with a 97% chance, but there is a risk — about 40% — that rates could peak at 4.35% by the end of this year.
The rate hikes have added hundreds of dollars to average monthly mortgage repayments, weighing on consumer spending, which had been resilient at first thanks in part to savings amassed during the pandemic.
Monday's data showed spending at department stores recorded the largest rise, up 3.6%, followed by clothing, footwear and personal accessory retailing.
Australian bank ANZ last week reported spending on its own cards slid 10.4% in
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