AU: Retail Sales

Thu Nov 02 19:30:00 CDT 2017

Consensus Actual Previous Revised
Month over Month 0.4% 0.0% -0.6% -0.5%
Year over Year 1.4% 2.1%

Retail sales in Australia was flat on the month (seasonally adjusted) in September after a decline of 0.5 percent in August, weaker than the consensus forecast of 0.4 percent. Seasonally adjusted retail sales rose 1.4 percent on the year in September, slowing from 2.1 percent in August.

Flat headline sales growth in September reflects increases in food retailing (0.6 percent), department stores (2.1 percent), and cafes, restaurants and takeaway food services (0.3 percent), offset by falls in other retailing ( minus 1.7 percent), household goods retailing (minus 0.4 percent), and clothing, footwear and personal accessory retailing (minus 0.7 percent)

Sales rose on the month in September in five of the eight Australian states and territories, advancing by 0.2 percent in the most populous state, New South Wales, but were flat on the month in Victoria, the second most populous state.

In quarterly terms, the volume of retail sales rose just 0.1 percent in the three months to September, slowing sharply from the increase of 1.5 percent recorded in the three months to June. This suggests that household consumption will make a weaker contribution to headline economic growth in this quarter, consistent with the Reserve Bank of Australia's assessment that slow wages growth and high household debt has weighed on consumer 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.