Flat retail sales in April could force RBA to | Australian Markets
Flat retail sales in April could force the Reserve Bank to present further charge cuts sooner than anticipated, economists say, after back-to-back public holidays in the month failed to elevate spending.
Retail turnover underwhelmed expectations for a third-consecutive month of growth and fell 0.1 per cent to $37.2 billion, recent figures from the Australian Bureau of Statistics revealed on Friday.
Economists have been in search of a 0.3 per cent bounce, believing shoppers have been beginning to open their wallets after February’s charge cut from the RBA.
They additionally tipped a increase from Queenslanders who spent more than traditional in April following cyclone Alfred on the east coast and because the Easter and Anzac Day long weekends opened up the chance to journey and splurge.
“Despite these factors, retail sales pulled back and clearly showed that consumers remained very cautious about spending, especially on discretionary items,” AMP economist My Bui mentioned.
“Overall, real retail spending per person has stagnated since the beginning of the year, after improving throughout 2024.”
Ms Bui mentioned on a longer-term foundation, whole retail spending had improved from the trough, however the restoration had stalled.
While nominal retail revenues have been nonetheless up 3.8 per cent since final April, actual retail sales — which have been adjusted for inflation — have been solely up by about 1.4 per cent over the previous 12 months.
Oxford Economics Australia lead economist Ben Udy mentioned he anticipated consumption to rise over the remainder of the 12 months, supported by the restoration in actual family incomes and RBA charge cuts.
“But unless consumption picks up a little more strongly in the coming months, the RBA may cut rates even sooner than we currently expect,” he mentioned.
The central bank’s 0.25 basis-point discount of the money charge earlier this month was the second spherical of reduction following 13 hikes because it started lifting charges in 2022. The money charge now sits at 3.85 per cent.
Queensland posted the most important leap in retail turnover in April, up 1.4 per cent, adopted by WA, which was up 0.4 per cent. All different States and Territories recorded falls.
“Queensland retailers recovered from last month’s temporary business closures and fewer customers,” ABS head of business statistics Robert Ewing mentioned.
There have been blended outcomes throughout industries, with the most important falls recorded in clothes, footwear and personal accent retailing, in addition to malls — each down 2.5 per cent.
“Clothing retailers told us that the warmer-than-usual weather for an April month saw people holding off on buying clothing items, especially new winter season stock,” Mr Ewing mentioned.
Food-related spending continued to rise, with growth in cafes, eating places and takeaway food providers up 1.1 per cent.
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