Free Trial

MNI BRIEF: Aust Retail Sales Resilient Despite RBA Hikes

MNI (PERTH)
MNI (Perth)

The Reserve Bank of Australia's five consecutive rate hikes have yet to be fully felt by consumers as August retail sales rose a better-than-expected 0.6%, highlighting the resilience of household spending. While the August data slowed from the 1.3% pace recorded in July, it was the eighth consecutive monthly rise and lifted y/y retail sales growth to 19.2%, the Australian Bureau of Statistics said - the highest since April 2021.

The RBA, which meets next Tuesday, has cited household spending behaviour as an "important source of uncertainty" given consumer sentiment gauges are hovering near recessionary levels and the full impact of 225bps of hikes since May are yet to be reflected in mortgage interest rates. However, the jobs market remains tight and wages are rising. Expectations have firmed for another 50bps hike at next week's meeting.

August's retail sales data suggests households continue to draw down on the AUD250 billion of savings accrued during the pandemic to help smooth spending as prices and interest rates rise. The Australian dollar was largely unmoved after the retail sales data was released (see AUD: Ignores Modest Retail Sales Beat, Eyeing 0.63 Handle).

Source: Australian Bureau of Statistics

Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
True
Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
True

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.