AU: Retail Sales

Wed Oct 04 19:30:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.2% -0.6% 0.0% -0.2%
Year over Year 2.1% 3.6% 3.5%

Retail sales in Australia fell 0.6 percent (seasonally adjusted) in August after a decline of 0.2 percent in July, falling well short of the consensus forecast of 0.2 percent. Seasonally adjusted retail sales rose 2.1 percent in year-on-year terms in August, slowing from 3.5 percent in July.

The drop in headline retail sales was largely driven by weaker sales of food, household goods, and clothing and footwear. This was partly offset by stronger sales for department stores and other retailing outlets.

Sales fell on the month in August in all eight Australian states and territories, declining by 0.2 percent in the most populous state, New South Wales, and by 0.8 percent in Victoria, the second most populous state.

Recent weakness in retail sales is consistent with concerns about the outlook for household consumption made by the Reserve Bank of Australia at its monthly meeting earlier in the week. Officials cautioned that slow wage growth and high household debt will likely restrain household spending in the near to medium-term.

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.