AU: Retail Sales

Mon Feb 05 18:30:00 CST 2018

Consensus Actual Previous Revised
Month over Month -0.2% -0.5% 1.2% 1.3%
Year over Year 2.5% 2.9%

Retail sales in Australia fell 0.5 percent on the month (seasonally adjusted) in December after a revised increase of 1.3 percent in November. This is the first monthly decline in sales since August but follows a particularly strong result in November, which was partly driven by the release of a new model of mobile phone. Seasonally adjusted retail sales increased 2.5 percent on the year in December, slowing from 2.9 percent in November.

The fall in headline retail sales in December reflects declines in most categories, with sales of household goods and other retailing recording particularly large declines of 2.7 percent and 1.8 percent respectively after both had risen strongly in November. Sales also declined for clothing, footwear and personal accessory retailing, cafes, restaurants and takeaway food services, and department stores, partly offset by an increase of 0.7 percent in food sales.

Sales declined on the month in December in all but one of the eight Australian states and territories, falling by 0.1 percent in the most populous state, New South Wales, and by 0.5 percent in Victoria, the second most populous state. Sales were flat in the third most populous state, Queensland.

Despite the weakness in December, quarterly data suggests consumer spending provided a solid boost to economic growth towards the end of 2017. In seasonally-adjusted terms, the volume of sales increased 0.9 percent on the quarter in the three months to December, up strongly from an increase of 0.1 percent in the three months to September.

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.