Australian retail sales have met expectations in September, rising 0.4%. Despite coming in line with expectations, the annual increase fell to just 3.65%, the slowest pace seen since January 2015.
In seasonally adjusted terms the ABS reported increases in household goods retailing (1.0%), cafes, restaurants and takeaway food services (0.9%), food retailing (0.3%), other retailing (0.4%) and clothing, footwear and personal accessory retailing (0.2%). Department stores was the only category to register a decline at 2.0%.
From a year earlier household goods retailing recorded the fastest growth at 5.8%, narrowly shading clothing, footwear and personal accessory retailing which increased 5.7%. Department store sales recorded the weakest pace of growth at 1.3%.
From a geographic perspective, sales increased in Victoria (0.8%), New South Wales (0.3%), Western Australia (0.5%), South Australia (0.3%), Tasmania (0.8%) and the Northern Territory (1.0%). Offsetting those gains sales fell in Queensland (-0.3%) and the Australian Capital Territory (-0.1%).
From 12 months earlier Victoria recorded the fastest sales growth at 4.8%, outpacing gains of 4.1%, 3.6% and 3.2% from New South Wales, South Australia and Tasmania. The Northern Territory, having been in negative territory in recent months, recorded growth of 1.2%.
Alongside the monthly retail sales report, the ABS also released quarterly volumes data, a partial input for household consumption that feeds into quarterly GDP.
In seasonally adjusted volume terms, turnover rose 0.6% in the September quarter, following a rise of 0.7% in Q2. Markets had been expecting a slightly larger increase of 0.7%.
In terms of monetary policy implications, there is little to come from the September report. Sales remain solid without being spectacular, fitting with elevated levels of unemployment and subdued levels of consumer confidence. While the annual pace of sales declined, it was largely due the high base effect from September 2014 rather than any sharp deceleration in sales activity.
Given recent improvements in consumer confidence and evidence that unemployment is steadying, the grounds for a modest pickup in sales remains in place in the months ahead.
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