Australian retail sales grew strongly in August as household wealth touched record highs and unemployment edged lower – signs that activity might pick up in coming months.
Retail sales rose 0.4%, data from the Australian Bureau of Statistics on showed on Wednesday. That was double the 0.2% markets had been looking for and the biggest gain for seven months.
The central bank was cautious on household spending when it held rates at a record low of 1.5% earlier this week, having cut them in August and May.
The question now is whether one month’s rosy data can become a sustainable trend. Capital Economics doubts it.
According to its analysts, “The soft start to the third quarter still means that even if retail sales rose by 0.4% again in September, real consumption growth in the third quarter probably wasn’t stronger than the subdued 0.4% (quarter-on-quarter) rise in the second quarter”.
“So a sizable rebound in real consumption growth in the second half of the year seems unlikely.”