Despite mounting pressure on the cost of living, Australian consumers are still maintaining their spending habits, with July retail sales beating expectations.
According to data from Australian Bureau of Statistics Total retail sales rose 1.3% in July, according to (ABS), well above analyst expectations of a 0.3% to 0.4% rise.
The surprising increase comes on the heels of a slowdown in sales volumes over the past two months, with the industry registering growth of 0.2% in June and 0.7% in May.
Also, compared to the last 12 months, the retail industry as a whole increased by 16.5%.
“After slowing growth in recent months, July’s 1.3% gain was the biggest since March’s 1.6% rise,” said ABS’ head of retail statistics. Ben Dover said.
ANZ economist Adelaide Timbrel said the influx of tourists may have contributed to July’s sales, as international travel increased in July.
In addition, CreditWatch economist Anneke Thompson said Australian consumers often appear to be “catch-up” buying items such as clothing and footwear.
“Overall, the news remains positive for businesses as consumers have yet to close their wallets.”
Sales increased between 1.2% (food retail) and 3.8% (clothing and footwear) across all retail categories, with the exception of household goods, which fell 1.1% in July.
Sales in this category fell threefold in four months.
Among jurisdictions, Victoria and the Australian Capital Territory were the only states with a 1.8% increase in retail sales and a 0.3% decrease in sales.
Inflation is likely to be reflected in retail data
Monthly retail data are not adjusted for inflation, so retail sales in July may be affected by higher costs of goods and services.
Economists said it was unclear to what extent inflation had boosted sales, but JP Morgan economist Ben Jarman suggested consumers were spending more, notably on energy and other sources. It said retail data did not include categories that contributed to inflation in the June quarter. .
Meanwhile, National Australia Bank economist Tapas Strickland said data showed households were still spending, suggesting the central bank likely raised interest rates to slow demand. Stated.
“For Australia, today’s rise reinforces the argument that the Reserve Bank of Australia should raise rates by 50 basis points in September,” Strickland said.
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Alfred Bui is an Australian reporter based in Melbourne, focusing on local and business news. He is a former small business owner and holds his two master’s degrees in business and business law. Please contact [email protected]