Retail sales figures have been lacklustre for the past couple of years but in 2018 the annual growth rate showed some signs of stabilising, albeit at a low rate. Annual growth rates started trending up in early 2018 and growth rates of individual months exceeded expectations on several occasions. However, December’s figures were substantially under market expectations and the latest batch of figures have missed as well.
According to the latest ABS figures, total retail sales increased by 0.1% over January on a seasonally-adjusted basis, below the expected +0.3% increase but a marked recovery from December’s revised figure of -0.4%. On an annual basis, retail sales increased by 2.7%, just under December’s revised figure of 2.8%.
Westpac senior economist Matthew Hassan said, “Overall, the slight gain in January confirms retail spending remains very soft; not quite contracting in nominal terms but likely to be down in volume terms once price changes are excluded.”
Reactions in local financial markets was subdued. By the end of the day, the yield on 3-year Treasury bonds had ticked up 1bp to 1.62%, 10-year yields had shed 2bps to 2.08% while 20-year 2.61% remained unchanged at 2.47%. The Aussie dollar dipped from 70.35 US cents on the release and then climbed to 70.50 US cents before it finished the afternoon session at 70.45 US cents.