Australian retail sales lose steam as tax cuts fail to excite shoppers
Adds detail, quotes from analysts
By Stella Qiu
SYDNEY, Aug 30 (Reuters) -Australian retail sales were flat in July after two months of upbeat results,showing large-scale tax cuts were yet to boost spending and firming expectations the next move in interest rates will be down.
Data from the Australian Bureau of Statistics (ABS) on Friday showed retail sales were unchanged in July month-on-month, slowing from the 0.5% rise in June. Analysts had expected a 0.3% increase in July.
Sales rose 2.3% from a year earlier, slowing from previous month's 2.9% as consumers grappled with inflation and high mortgage rates. That was a weak result compared with the country's population growth of about 2.6%.
Spending on clothes and at department stores took a hit, down 0.6% and 0.5% month-on-month, respectively, in July,while cafes, restaurants and takeaway food all saw a drop of 0.2% as shoppers turned frugal.
Food retailing was the only category that saw an increase, up 0.2%. Indeed, Australian grocers Coles COL.AX and Woolworths WOW.AX both posted decent profits.
"Overall, it's clear there was little momentum behind consumer spending at the start of the quarter. And while it is early days, the data broadly reinforce our view that Australian households are not rushing to spend their newfound tax cuts," said Abhijit Surya, Australia and New Zealand economist at Capital Economics.
"At the margin, the weakness in household consumption raises the risk that the RBA will cut rates before Q2 2025 as we're currently forecasting."
This weakness is the result of high interest rates with the Reserve Bank of Australia (RBA) raising rates by 425 basis points to 4.35% since May 2022 to tame inflation, which ran at 3.5% in July, above the bank's 2-3% target band.
Policymakers have ruled out a near-term rate cut, wary that consumption could pick up more than expected as real incomes turn positive thanks to the government's sweeping tax cuts in July, giving average wage earners an extra A$1,500 a year.
House prices have also been hitting record highs this year as a rush of migrants stretch limited supply, increasing the wealth of home owners.
Recent bank data on card transactions suggests July was sluggish, with Westpac observing consumers are mostly sitting on the extra cash from tax cuts rather than spending it and the third quarter would be likely another soft quarter.
Markets have been scaling back bets for a rate cut this year after July inflation slightly beat expectations. A first easing in December is no longer a done deal, with just a 80% probability. 0#RBAWATCH
Reporting by Stella Qiu and Wayne Cole; Editing by Jacqueline Wong and Sam Holmes
Aset Berkaitan
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
