Retail Sales - Consumers Treading Cautiously

• Retail spending disappointed in March, reporting no growth for the month. This followed stronger growth of 0.6% in February.
• Food was the only retailing category to increase in March, rising 0.7%. All other categories, including clothing, footwear & personal accessories (-0.2%), household goods (-0.3%), department stores (-0.5%), other retailing (-0.6%), cafes, restaurants & takeaway (-0.8%) declined in the month. This highlights soft conditions in areas of discretionary spending.
• Retail sales growth was strong in the ACT, rising by 1.5% in March, the largest monthly increase since December 2015. Retail sales also rose in Victoria (0.2%), South Australia (0.2%) and the Northern Territory (0.1%) in March.
• After adjusting for the impact of prices, retailing volumes rose a meagre 0.2% in the March quarter, a lacklustre result following the 0.8% increase in the December quarter.
• Today’s data points to a rather dismal quarter of consumer spending, after relatively firm growth in the December quarter. Limited wage growth, high household debt burdens and the softening in the housing market are keeping a lid on household spending. That said, solid employment gains should be supportive.

 

Please see the attached report for more information.

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