Retail sales figures have been lacklustre for the past couple of years despite a falling savings rate. Economists have explained the low growth rate as a result of record household debt and modest income growth. While sales figures for two out of the last three months have beaten expectations, some more positive figures will be required before economists call a change in what has been a down-trend since 2014/2015.
Total retail sales rebounded in April and total retail sales grew by +0.4% over the month, seasonally adjusted. On a year-on-year basis, sales grew by 2.6%, down from March’s 3.2% annual rate.
The better-than-expected increase followed a flat result in March and a strong 0.6% increase in February. The median market expectation was for a +0.3% increase and bond yields and the local currency finished the day higher. Yields on 3 year bonds increased by 5bps to 2.21% and 10 year bond yields added 3bps to 2.74% while the local currency increased by around 0.8 US cents to 76.50 US cents.
Clothing sales fell by 0.8% while department stores sales fell by 0.9% over the month. All of the other categories recorded increased sales, with cafes and restaurants providing the largest contributions.