MNI ANALYSIS:Australia Retail Shows H'Hold Spend Still A Worry

By Sophia Rodrigues

     SYDNEY (MNI) - Australia's retail sales rose less than expected in January,

marking a subdued start to household spending in the first quarter of this year

and leaving household consumption as a key uncertainty to the Reserve Bank of

Australia's forecasts.

     The data supports the RBA's hold-for-longer monetary policy stance with

little prospect for a cash rate hike later this year or even in the early part

of next year.

     Data published by the Australian Bureau of Statistics Tuesday showed retail

sales rose 0.1% m/m in January, a very subdued outcome compared with MNI median

forecast for a 0.4% rise. It was also on the lowest side of the 0.1% to 0.5%

range predicted by economists in MNI poll. The outcome, however, left trend

retail sales at +0.3% m/m in January and December.

     In the latest month, food retailing was flat m/m, after a 0.8% rise in

December. Household goods retailing rebounded from a 2.8% fall in December but

the rise was just 0.1%. Department stores fell 0.6%, and was down for three

months in a row, suggesting households remain cautious about discretionary

spending.

     Below is table for Retail trade data for January:

                                              January                   December

--------------------------------------------------------------------------------

                                   (M/M %, seasonally         (M/M %, seasonally

                                            adjusted)                  adjusted)

Retail Sales                                     +0.1          -0.5(no revision)

MNI Median                   +0.4(range +0.1 to +0.5)

Food Retailing                                    0.0                       +0.8

Household Goods                                  +0.1                       -2.8

Clothing, Footwear etc                           -0.7                       -0.1

Department Stores                                -0.6                       -1.0

Other Retailing                                  +1.0                       -1.8

Cafes, Restaurants,

Takeaways                                        +0.1                       -0.3

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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