In what was a stunning beat of market expectations Australia’s September retail sales printed a seasonally adjusted increase of 1.2% against market expectations of a rise of 0.4%.
The ABS said that the iPhone 6 release was partly responsible for this big kick higher noting that, “the increase in electrical and electronic goods retailing represents about half of the total Australian sales movement of 1.2 per cent in seasonally adjusted terms.”
But, this data can not be dismissed as another in the series of ABS rogue data releases because other sectoral indicators that we watch in this series suggest that the renewed positivity seen in the consumer confidence surveys is gaining currency.
While the data showed electronic goods retailing rose 9.2% helping household goods to a 4.1% increase it also showed that discretionary sectors such as cafes, restaurants and takeaway rose 2% and department store sales rose 1.3% in the month.
That’s good news for the economic transition and while one month is not a trend, as ANZ chief economist Warren Hogan said this morning, the pick-up in confidence augurs well for Christmas.
Indeed the 3 and 12 month rate of change in retail sales have both picked up again and the average rise over the past six months increased from 0.1% to 0.3%.
The iPhone was an important driver of the huge 1.2% return but this data tells us that the outlook is brightening for the retail sector and perhaps the economy as a whole.