Investing.com-- Australian retail sales missed expectations in April, remaining flat from the prior month as a rising cost of living and high interest rates saw consumers pulling back further on spending big.
Retail sales were flat in April from the prior month, data from the Australian Bureau of Statistics (ABS) showed on Friday. The reading missed expectations for a rise of 0.3%, and showed that growth was slowing after a 0.4% rise in March.
Most retail sectors saw a drop in sales, with only department stores and clothing seeing gains as consumers spent chiefly on warm clothing ahead of the winter season.
Spending on food also remained relatively high amid steep food price inflation, but dropped in April from the prior month.
Overall retail spending suffered as inflation remained pinned near 30-year highs, and as continued interest rate hikes by the Reserve Bank pushed up mortgage costs.
“Retail turnover has plateaued over the last six months as consumers spent less on discretionary goods in response to cost-of-living pressures and rising interest rates,” Ben Dorber, ABS head of retail statistics, said in a statement.
Dorber noted that the return of cultural events after the COVID-19 pandemic was also helping keep retail spending somewhat buoyed.
Friday's reading came as a private survey showed earlier this month that Australian consumer sentiment was at its worst level since the COVID-19 pandemic and the 2008 financial crisis.
A sharp rise in interest rates over the past year has largely weighed on the economy, with the RBA now forecasting weak economic growth in the coming months.
While a robust labor market has still helped support some spending and sentiment, the RBA also expects this to change as economic growth cools.
Australia’s job market unexpectedly contracted in April, while unemployment rose from near 50-year lows. Wage price growth has also largely stalled in the country.
Begin trading today! Create an account by completing our form
At One Financial Markets we are committed to safeguarding your privacy.
Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.
Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.
By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.