ABS data showed retail sales fell 0.4% in March from February, helped by spending associated with sold-out Taylor Swift concerts. — Reuters
SYDNEY: Australian retail sales fell unexpectedly in March as cautious consumers pulled back spending amid elevated costs of living, while the growth in annual sales slowed to the lowest in more than two years.
The Australian dollar slipped 0.2% to A$0.6551 after the data while three-year bond futures extended earlier gains to be up six ticks to 95.96.
Markets trimmed the risk of a rate hike by September to 33%, from 44% before the data.
Data from the Australian Bureau of Statistics (ABS) yesterday showed retail sales fell 0.4% in March from February, when they rose by a revised 0.2%, helped by spending associated with sold-out Taylor Swift concerts.
Analysts had looked for a rise of 0.2%.
“The Taylor Swift-inspired boost in turnover for fashion and accessory retailers last month has proved to be temporary with an instant reversal this month,” said Ben Dorber, ABS head of retail statistics.
“Underlying retail turnover has been flat for the past six months. Outside of the pandemic period and introduction of the general sales tex, this is the weakest growth on record when comparing turnover to the same time in the previous year.”
Indeed, sales of A$35.66bil were up just 0.8% from a year earlier, the slowest pace of gains since August 2021 when Covid-19 shutdowns paralysed parts of the economy.
The retail sales report is the last piece of information before the Reserve Bank of Australia’s policy decision next Tuesday where it is widely expected to keep interest rates on hold at 4.35% for a fourth straight meeting.
However, the outlook has changed drastically since a surprisingly hot first quarter inflation report last week that decimated any chance of policy easing this year.
For March, the largest falls were recorded in clothing, footwear and personal accessory retailing and department stores, offsetting large rises the month before. — Reuters
