Australian consumers are buying more but paying less. That’s one of the conclusions to be had out of the latest retail sales figures. According to the Australian Bureau of Statistics, December retail sales growth was lower than expected and it was driven by an unusually large fall in the household goods category, which includes furniture, floor coverings, housewares, Manchester, electrical goods as well as hardware and building supplies.
In total, sales figures fell 0.1% over the month or 3.0% for the 12 months to the end of December. November’s comparable figures were 0.2% and 3.3%. The market was expecting 0.3% but some economists think the 2.3% decline in household goods may have been related to the closure of Masters Home Improvement stores.
Bond yields dropped on the day; 3 year bond yields fell 2bps to 1.98% and 10 year yields fell 3bps to 2.795%. However, US and UK 10 year bond yields were both down 3bps (Friday night, US/UK time) so the effect of the retail data on local bond yields is debatable.