MNI 5 THINGS. Australia Retail Sales Beat F'casts, Still Flat

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's Retail Sales grew 0.3% in October, just ahead of

forecasts, data release by the Australian Bureau of Statistics Thursday showed.

     Here are five points of note from the release: 

     Retail sales modest rise. Australian retail sales rose 0.3% in October

against a downwardly revised 0.1% in September. The market had been expecting a

0.2% rise.

     Flat start to Q4. Final quarter results are traditionally more buoyant, but

today's results suggest that retailers cannot expect a major end of year boost.

November data is often the highest as consumers do their pre-Christmas shopping,

and the market will be looking for a figure above 1.0% when the ABS next

reports.

     RBA watching closely. Today's results come after GDP figures this week

showed annualised growth had fallen from 3.3% to 2.8%. A slowing economy goes

against RBA forecasts, with the Bank expecting that its expansionary interest

rate stance would flow through to growth and inflation. Flat retail sales are

another indication that Australian growth has stalled, and could suggest that

any RBA interest rate increases may be delayed further.

     Cafes and Restaurants weaker. Spending on cafes, restaurants and takeaway

food has supported overall retail sales data through the year, but fell 0.9% in

the biggest fall since August 2017. One of the major RBA concerns is weak

consumer spending coming from slow wage growth, and consumers cut back on this

discretionary spending in October.

     Clothing and footwear sales to the rescue. The data showed a rare 2.6%

boost in spending on clothing, footwear and personal accessories. This was the

best result for this sector in 2018 and a rebound from the fall of 2.0% posted

in July.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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