Australian retail spending weak despite RBA rate cut
Retail sales jumped 0.2 per cent in May following a disappointing April when sales fell by 0.1 per cent despite two long weekends in the period.
Oxford Economics Australia head of economic research and global trade Harry Murphy Cruise said households remained pessimistic and it was weighing on sales.
'For households, the uncertainty of global events and the ghosts of inflation past are trumping the good news in the labour market,' he said.
'Unemployment remains remarkably low, with soaring job vacancies suggesting workers can remain confident that good news will continue.
'But the shadow of tariffs, the slowdown in China, and years of price rises eroding real disposable incomes are keeping households' wallets firmly closed.'
Mr Murphy Cruise said Wednesday's results showed households needed more convincing via rate cuts before they lifted spending.
'Today's data is another notch in the column to cut rates when the RBA meets next week,' he said.
ABS head of business statistics Robert Ewing said spending remained weak, with the jump on the back of clothing purchases.
'Retail spending was otherwise restrained this month, with a drop in food-related spending and flat results across household goods,' he said.
Clothing, footwear and personal accessory retailing rallied 2.9 per cent and department stores were up 2.6 per cent, but they were the only industries to rise, although both were off the back of large falls in April.
'Clothing retailers and department stores were boosted by people buying winter clothes, having held off on those purchases with the warmer-than-usual weather last month,' Mr Ewing said.
While there was a bounce in clothing retailing, food-related spending fell for the first time this year.
Food retailing went backwards 0.4 per cent for the month, while spending in cafes, restaurants and takeaway food services came in flat.
The weaker-than-expected results came as experts said retail growth would be about 0.5 per cent on the back of a rate cut in May.
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