AU: Retail Sales

February 5, 2017 06:30 CST

Consensus Actual Previous Revised
Month over Month 0.3% -0.1% 0.2% 0.1%
Year over Year 3.0% 3.3% 3.2%

Retail sales in Australia fell by 0.1 percent (seasonally adjusted) in December after an increase of 0.1 percent in November. This was below the consensus forecast for growth of 0.3 percent and is the first month-on-month fall since late 2015. Seasonally adjusted retail sales rose 3.0 percent in year-on-year terms in December, down slightly from the 3.2 percent growth recorded in November.

Weak headline growth in December reflected lower sales for household goods retailing (minus 2.3 percent) and other retailing (minus 0.2 percent). These falls were partly offset by higher sales for food retailing (0.5 percent), clothing, footwear and personal accessory retailing (0.3 percent), cafes, restaurants and takeaway food services (0.2 percent), and department stores (0.1 percent).

Turnover fell in three of the eight Australian states and territories in December, with the two most populous states, New South Wales and Victoria, seeing falls of 0.3 percent and 0.4 percent respectively. Sales were also flat in the third most populous state, Queensland, with modest increases recorded elsewhere.

Despite the weak monthly number for December, quarterly data show a solid rebound in retail volumes in the three months to December, up 0.9 percent quarter-on-quarter after flat growth in the three months to September. This suggests that GDP data for the three months to December may show solid growth in private consumption spending.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The Retail Business Survey covers all employing retail trade businesses who predominantly sell to households.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the overall picture, but also the trends among different types of retailers. Especially strong apparel or electronics sales can indicate strength in those industries, for example. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.