Australia Retail Sales Decline

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Australia Retail Sales Decline

Australian Retail Sales Decline 0.4% During March

With a mix of high rates and sticky inflation in Australia, a decline of 0.4% was seen in retail sales during March. According to experts, the shrinking of retail sales during March was unexpected & thus took the markets by surprise.

Given Australia's high-interest rates along with persistent inflation, retail sales will likely decline in the next few months as well.

On a m/m basis, a -0.4% change was seen in Retail sales, according to the ABS data. The forecast for March's retail sales was +0.2%, but a reading of -0.4% took everyone by surprise. At the same time, it also highlighted a reversal from the February's 0.3% increase.

Retail Sales Show Consistent Downtrend

One of the simple reasons for a decline in retail sales is that inflation is still high enough for consumers. That's exactly what we are seeing in Australia as the everyday consumer struggles with higher rates and inflation.

According to experts, the uptick in spending seen during February was due to Taylor Swift's concerns. Now that they are over, it is highly likely to see the same spending trends in the next few months.

The bottom line is that Australian consumers are struggling with a higher cost of living as the RBA remains committed to keeping the rates at a historic high.

If we look at the retail sales trend in the last six months, it shows a consistent downtrend with the only expectation in March.

Overall, Australia is experiencing the weakest growth in recent history if we don't include the COVID-19 pandemic era.

Despite how it looks on the surface, it was the RBA target to dampen consumer demand. According to them, that's the easiest way to bring down the inflation rate. Now that the retail sales have taken a hit, it would be interesting to see its effects on the Australia's inflation rate.

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