Australian Retail Sales Stagnate as Elevated Rates Take Toll
(Bloomberg) -- Australian retail sales growth stalled in July as elevated interest rates force households to hunker down on discretionary spending.
Most Read from Bloomberg
Dense Cities With Low Emissions Suffer Most From Air Pollution, Study Finds
Intergenerational Housing Could Help Older Adults Combat Loneliness
As Rural Hospitals Shutter Maternity Wards, Urban Ones Follow
Sales were unchanged from the prior month, versus economists’ estimate of a 0.3% gain, data from the Australian Bureau of Statistics showed Friday. The result snapped a three-month stretch of expansion.
The Reserve Bank has held rates at a 12-year high of 4.35% for the past nine months to try to rein in inflation, while highlighting that the outlook for household spending remains a key uncertainty. Consumption accounts for more than half of gross domestic product.
“After rises in the past two months boosted by mid-year sales activity, the higher level of retail turnover was maintained,” Ben Dorber, ABS head of retail statistics, said in a statement. “Western Australia continues to be the standout of the states and territories, having risen for the seventh consecutive month.”
WA is the center of Australia’s resource economy that’s enjoyed a windfall from high commodity prices.
The RBA next meets on Sept. 23-24, when economists and markets anticipate it will leave interest rates unchanged again.
Money markets are wagering about a 70% chance of a rate cut in December. That’s come down from previously fully pricing an easing and reflects stubbornly strong inflation and the RBA’s recent hawkish rhetoric.
Friday’s retail data also showed:
Clothing, footwear and personal accessory retailing led the declines, falling 0.5%, followed by department stores, down 0.4% and cafes, restaurants and takeaways
The only industry that had a rise in July was food retailing, up 0.2%
Most Read from Bloomberg Businessweek
Hong Kong’s Old Airport Becomes Symbol of City’s Property Pain
Far-Right ‘Terrorgram’ Chatrooms Are Fueling a Wave of Power Grid Attacks
?2024 Bloomberg L.P.