Bargain hungry Australians are shopping their hearts out
But this rush of retail blood isn't a display of stronger consumer confidence, instead the sales bump has come from left field. The 1.2 per cent boost in June's retail sales was much stronger than the May rise of 0.5 per cent and the April reading, which was flat.
The catch here is that the buying bonanza has been almost entirely driven by bargain hunting for discretionary goods, propelled by clothing footwear and household items.
Shares of electronics retailer JB Hi Fi, Harvey Norman, Nick Scali and Wesfarmers rose on the back of the retail data released on Thursday by the Australian Bureau of Statistics and even department store operator Myer's share price moved up on the news.
Most of the retail categories, even food retailing, came in ahead of expectations in June. The one sector that didn't feel the love was eating out and takeaway food, with the sector turning negative ion June after a mildly positive reading in May.
But the stronger sales number is a mixed blessing for retailers. While the increased demand and volume of sales is a positive, selling goods at discount is a surefire way of whittling down their profit margins.
The other worry is that the big spend in June may not be repeated over the next couple of months, so any gains to be had are slowly unwound.
What the data does support is that households have the money and the desire to spend on big ticket items as long as they believe they are receiving value. It also indicates that Australians have not been unduly phased by the international economic turmoil introduced by Trump's tariff attack.
However, there will be questions asked about whether this strong buyer sentiment will impact the Reserve Bank of Australia's deliberations on whether there are any risks associated with cutting interest rates in August.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
8 minutes ago
- Sydney Morning Herald
The door is open for Trump to create more chaos
Trump has said he is considering four contenders for the position of the Fed's chair, which will open up in May next year when the term of the current chair, Jerome Powell, who Trump detests and attacks relentlessly and viciously, will end. Hassett, current governor Christopher Waller and former governor Kevin Warsh are thought to be on his short list. He is weighing up whether to announce a short-term appointment – someone who would fill the position until the term expires on January 31 next year – or appointing a 'chair elect' who will succeed Powell when his term as chair ends next May. It's a pivotal decision because the Kugler position might be the only opportunity he has to inject a loyalist into the Fed boardroom during this term. Powell's chairmanship might end in May but, should he choose to remain on the board, his term as a governor runs until 2028. There are no other scheduled retirements during the Trump presidency. There are reports that Trump's advisers (which include unusual names, like Fox's Sean Hannity and MAGA heavyweight Steve Bannon) are urging him to appoint someone who will occupy the seat only until January, giving him more time to decide on Powell's replacement. Trump could appoint someone designated as Powell's successor, hoping that a 'shadow' chair would undermine Powell and Powell's messaging both within and outside the Fed's boardroom. The US Treasury Secretary Scott Bessent (who has withdrawn himself from contention for the role), mooted exactly that strategy ahead of last year's US election. Whether the appointment is short term or unveils Powell's successor, however, the new governor would be one of only two Trump-appointed members on the seven-member board and the 12-member Federal Open Market Committee that actually decides US monetary policies. The other is the Fed's deputy chair, Michelle Bowman. Loading While Trump has made it very clear what he wants from the next Fed chair, it is less obvious what qualifications, other than loyalty, Trump wants from the incoming BLS commissioner. The blueprint for this administration – 'Project 2025' – recommended appointing political appointees to the Labor department, within which the BLS sits, and consolidating the BLS with other data collecting agencies into a 'more manageable' mega statistical agency. The BLS could do with a (non-political) overhaul. It has a challenge with its current data surveys because, post-COVID, the response rates from businesses have dropped significantly. That's part of the explanation for why its revisions of June quarter data, which showed a major fall in jobs generation, were so large. Even as it has become harder for the bureau to collect accurate data, it has experienced a reduction in its resources in recent years that is being compounded by job losses and an 8 per cent cut to next year's budget because of Trump's assault on the US bureaucracy. If its data is to be made more reliable and credible, it needs more, not fewer, resources and someone – like Kugler – who is non-partisan and clearly qualified as its head. If Trump appoints a loyalist, it would cast a shadow over the accuracy of data central to the markets and businesses' understanding of economic conditions and probably lead to an increase in risk premia in US interest rates. The ironic aspect of Trump's response to the weak employment data is that it actually strengthens the case for a rate cut. The Fed has a dual mandate, charged with maximising employment and price stability. It has kept rates on hold while it waits to see the effects of Trump's trade policies on an inflation rate that, at 2.7 per cent, is already above its target of 2 per cent. The two appointments to critical economic agencies have the potential to undermine the credibility of the Feds's policy decisions and the BLS's data if financial market participants and businesses suspect that the Fed's decisions and the BLS' data have been tainted by political influences. The inflation rate has been edging up even before the full effects of Trump's tariffs have had time to reveal themselves, but the economy has slowed markedly and the BLS data shows the unemployment rate is edging up even as the job market shrinks and salaries stagnate. Where, before that data, the odds were against a rate cut at the Fed's meeting next month, they – and an increasing number of Fed governors – now favour a rate cut. Instead of accusing (without any evidence) the BLS of manipulating its date to make his economic management look bad, Trump should have seized on it to proclaim that he was right, and the Fed wrong, on the need for a rate cut. Trump can probably cause conflicts and dysfunction within the Fed and the BLS if that is his objective with the appointments he makes. Whether that achieves his broader ambitions, however, is another matter. Even if he could stack the Fed board with loyalists, which he can't, or intimidate the majority of the Open Market Committee, which is unlikely, the Fed can only influence US short term rates. The federal funds rate anchors the bond market's yield curve, but longer term rates are set by the market itself. If investors thought the Fed's decision-making had been politicised, they would demand higher yields to compensate for the increased risk of inflation and increase the premium required for holding longer-term bonds. The yield curve would steepen, and it is those yields at the longer end of the curve that determine the rates on mortgage and car loans and business' interest costs. Loading It is the Fed's credibility as an independent, apolitical agency that will contain inflation that gives it a broader influence over the curve than just the federal funds rate. Similarly, if the BLS data is regarded as tainted and unreliable, it will inject uncertainty and caution into businesses' decision-making and probably lead to less employment and investment.
The Age
8 minutes ago
- The Age
The door is open for Trump to create more chaos
Trump has said he is considering four contenders for the position of the Fed's chair, which will open up in May next year when the term of the current chair, Jerome Powell, who Trump detests and attacks relentlessly and viciously, will end. Hassett, current governor Christopher Waller and former governor Kevin Warsh are thought to be on his short list. He is weighing up whether to announce a short-term appointment – someone who would fill the position until the term expires on January 31 next year – or appointing a 'chair elect' who will succeed Powell when his term as chair ends next May. It's a pivotal decision because the Kugler position might be the only opportunity he has to inject a loyalist into the Fed boardroom during this term. Powell's chairmanship might end in May but, should he choose to remain on the board, his term as a governor runs until 2028. There are no other scheduled retirements during the Trump presidency. There are reports that Trump's advisers (which include unusual names, like Fox's Sean Hannity and MAGA heavyweight Steve Bannon) are urging him to appoint someone who will occupy the seat only until January, giving him more time to decide on Powell's replacement. Trump could appoint someone designated as Powell's successor, hoping that a 'shadow' chair would undermine Powell and Powell's messaging both within and outside the Fed's boardroom. The US Treasury Secretary Scott Bessent (who has withdrawn himself from contention for the role), mooted exactly that strategy ahead of last year's US election. Whether the appointment is short term or unveils Powell's successor, however, the new governor would be one of only two Trump-appointed members on the seven-member board and the 12-member Federal Open Market Committee that actually decides US monetary policies. The other is the Fed's deputy chair, Michelle Bowman. Loading While Trump has made it very clear what he wants from the next Fed chair, it is less obvious what qualifications, other than loyalty, Trump wants from the incoming BLS commissioner. The blueprint for this administration – 'Project 2025' – recommended appointing political appointees to the Labor department, within which the BLS sits, and consolidating the BLS with other data collecting agencies into a 'more manageable' mega statistical agency. The BLS could do with a (non-political) overhaul. It has a challenge with its current data surveys because, post-COVID, the response rates from businesses have dropped significantly. That's part of the explanation for why its revisions of June quarter data, which showed a major fall in jobs generation, were so large. Even as it has become harder for the bureau to collect accurate data, it has experienced a reduction in its resources in recent years that is being compounded by job losses and an 8 per cent cut to next year's budget because of Trump's assault on the US bureaucracy. If its data is to be made more reliable and credible, it needs more, not fewer, resources and someone – like Kugler – who is non-partisan and clearly qualified as its head. If Trump appoints a loyalist, it would cast a shadow over the accuracy of data central to the markets and businesses' understanding of economic conditions and probably lead to an increase in risk premia in US interest rates. The ironic aspect of Trump's response to the weak employment data is that it actually strengthens the case for a rate cut. The Fed has a dual mandate, charged with maximising employment and price stability. It has kept rates on hold while it waits to see the effects of Trump's trade policies on an inflation rate that, at 2.7 per cent, is already above its target of 2 per cent. The two appointments to critical economic agencies have the potential to undermine the credibility of the Feds's policy decisions and the BLS's data if financial market participants and businesses suspect that the Fed's decisions and the BLS' data have been tainted by political influences. The inflation rate has been edging up even before the full effects of Trump's tariffs have had time to reveal themselves, but the economy has slowed markedly and the BLS data shows the unemployment rate is edging up even as the job market shrinks and salaries stagnate. Where, before that data, the odds were against a rate cut at the Fed's meeting next month, they – and an increasing number of Fed governors – now favour a rate cut. Instead of accusing (without any evidence) the BLS of manipulating its date to make his economic management look bad, Trump should have seized on it to proclaim that he was right, and the Fed wrong, on the need for a rate cut. Trump can probably cause conflicts and dysfunction within the Fed and the BLS if that is his objective with the appointments he makes. Whether that achieves his broader ambitions, however, is another matter. Even if he could stack the Fed board with loyalists, which he can't, or intimidate the majority of the Open Market Committee, which is unlikely, the Fed can only influence US short term rates. The federal funds rate anchors the bond market's yield curve, but longer term rates are set by the market itself. If investors thought the Fed's decision-making had been politicised, they would demand higher yields to compensate for the increased risk of inflation and increase the premium required for holding longer-term bonds. The yield curve would steepen, and it is those yields at the longer end of the curve that determine the rates on mortgage and car loans and business' interest costs. Loading It is the Fed's credibility as an independent, apolitical agency that will contain inflation that gives it a broader influence over the curve than just the federal funds rate. Similarly, if the BLS data is regarded as tainted and unreliable, it will inject uncertainty and caution into businesses' decision-making and probably lead to less employment and investment.
Sky News AU
an hour ago
- Sky News AU
James Paterson says Labor must realise it has 'no mandate for tax increases' ahead of reform round table
Shadow finance minister James Paterson has unleashed on the Albanese government for using the imminent economic reform roundtable as a forum to introduce fresh taxes. From August 19 to 21 the government will convene a group of 22 representatives from business, industry, unions and politics to discuss proposals aimed at kickstarting the economy and boosting Australia's record low productivity slump. The government has become increasingly concerned about the growing expectations attached to the three-day summit, according to the Sydney Morning Herald. Mr Albanese then dampened expectations on Monday and said: 'to be very clear, it's not a meeting of the cabinet … it's a meeting in the cabinet room.' With the Productivity Commission's five pillar platform having already received hundreds of ambitions tax submissions from a range of bodies, Mr Chalmers appeared to shift the goal posts of the roundtable on Tuesday, reorienting his priorities to reducing red tape and regulation and bolstering housing supply. The Coalition's finance spokesperson said the Treasurer had 'got ahead of himself' and that the government was now scrambling to alleviate mounting alarm in the business sector that the summit could be used to roll out sweeping tax hikes. 'It's very clear that the Treasurer has got ahead of himself, and the Prime Minister has pulled the reigns and brought him back to where he wants him be,' Mr Paterson told Sky News. 'I thought it was very pointed the other day when the PM said that just because this is a meeting in the cabinet room, it doesn't mean its subsuming the role of the cabinet – he is clearly very unhappy with how Jim Chalmers has allowed the scope to creep here." Although the purpose of the roundtable was aimed at lifting plummeting productivity, the ACTU used its submission to call on the government to limit negative gearing and the capital gains discount to one investment property. Mining giant Rio Tinto urged for the reimposition of an economy wide carbon tax. Mr Paterson said the Treasurer's sudden shift in tone showed the summit had become 'far bigger than the government intended it to be' and that ideas were being put on the table which 'the government had no mandate for.' 'It was also very illustrative yesterday in the Treasurer's walk back that he still said the government was going to use this exercise as a mandate for reform,' he said. 'You dint earn a mandate from a handpicked group of experts meeting in the cabinet room, you earn a mandate by taking policies to an election. 'This government has no mandate for any tax increases, and we will not be supporting them to increase taxes on Australians that they didn't have the decency or the honesty to put to them at the last election." Mr Paterson said the Prime Minister was slowly realising it would be 'unwise' to construct a process to make it appear that the government had a mandate for vast reform and vowed the Coalition would oppose a 'secret Labor agenda' to amend the taxation system. 'We will be constructive in the room as part of this process but that doesn't mean we are going to sign up to a secret Labor agenda or a union agenda of raising taxes,' he said.
