ANZ thinks next week's Australian retail sales report could be a shocker

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Australia’s retail sales report for August will be released next Thursday, and ANZ thinks it could be a shocker.

Jo Masters, senior economist at ANZ, is looking for a sizeable fall of 0.2% following a flat outcome in July.

“Retail sales likely fell in August, in our view, given higher petrol prices, lower house price growth, weakening consumer confidence and soft anecdotes,” she says.

“This would be the first negative outcome since March, and would see annual growth slow to 2.9% year-on-year from 3.6% year-on-year in July.”

Source: ANZ

Masters says that “conditions remain challenging for the retail sector”, adding that “it is not surprising to see the strength in sales through April and May wane”.

And she’s not the only one who thinks an ugly sales report could be on the way.

According to the National Australia Bank’s (NAB) latest Cashless Retail Sales Index — an indicator on spending patterns using payment forms other than cash — bricks-and-mortar sales could slump by as much as 0.5%.

“Based on movements in the NAB cashless spending index and our data mapping techniques, ABS retail trade is expected to decline by 0.5% in August which would be the weakest monthly growth rate since March 2013,” said Alan Oster, chief economist at the NAB.

The NAB is officially forecasting a decline of 0.3%.

Along with the NAB and ANZ, Morgan Stanley is also tipping a decline in sales of 0.2%.

The median economist forecast is currently centred around an increase of 0.3%.

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