Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Australian retail sales dim in Dec, but Q4 bright

Published 06/02/2018, 12:34 pm
Updated 06/02/2018, 12:40 pm
Australian retail sales dim in Dec, but Q4 bright

* Dec retail sales -0.5 pct vs forecast -0.2 pct

* Q4 sales +0.9 pct vs forecast +0.8 pct

* Online sales up 6 pct in original terms vs +20 pct in Nov

* A$ dips 20 pips to $0.7868 after disappointing monthly data

By Swati Pandey

SYDNEY, Feb 6 (Reuters) - Australian retail sales eased more than expected in December after a barnstorming couple of months, but still posted a smart rebound in the final quarter of 2017 in a positive sign for household consumption and economic growth.

Thursday's figures from the Australian Bureau of Statistics (ABS) showed retail sales eased 0.5 percent in December, from November when they rose a solid 1.3 percent led by Black Friday discounts. Economists polled by Reuters had predicted a 0.2 percent fall.

The pullback in part reflected the impact of online discounting events in November which brought spending forward. Online sales grew 6 percent in original terms in December, after jumping 20 percent in November.

The local dollar eased about 20 pips to $0.7868 AUD=D4 on the weaker-than-expected monthly number. Household goods led the falls with department stores, clothing, footwear, cafes and restaurants all posting losses.

For the fourth quarter as a whole, retail sales beat expectations to rise a rapid 0.9 percent in inflation-adjusted terms. That followed a very sedate 0.1 percent gain the previous quarter.

The revival greatly improved the outlook for gross domestic product growth, given household spending accounts for around 57 percent of annual economic output.

In the third quarter, household consumption had expanded at its slowest pace since 2008, marring an otherwise respectable annual growth outcome of 2.8 percent.

Consumer spending has been under pressure from record-high household debt and sluggish wage growth, one reason the Reserve Bank of Australia (RBA) is in no rush to raise interest rates from record lows.

The RBA is all but certain to keep rates at 1.50 percent at its first meeting of 2018 on Tuesday.

Futures markets 0#YIB; imply around a 50-50 chance of a hike by November and are not fully priced for a rise until early next year.

IMPORTS JUMP

Other data out Tuesday showed Australia recorded a trade deficit of A$1.36 billion ($1.07 billion) in December, confounding forecasts of a A$200 million surplus.

However, November's result was revised sharply to show a surplus of A$36 million, from an initial deficit of A$628 million, in part reflecting updated prices for iron ore and coal.

Analysts noted that prices climbed further in December, suggesting that the month's export earnings would also be revised higher at a later date.

The other main surprise in the trade report was the strength of imports, which jumped 6 percent in December.

While surging oil prices accounted for some of that, there were also solid increases in consumer and capital goods which augured well for consumption and investment. ($1 = 1.2698 Australian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.