The Australian Bureau of Statistics (ABS) just released retail sales for January.
The market had been expecting another 0.5% rise to follow last months 0.5% increase but the surge of 1.2% for the month was more than double the market expectation with December and November being upgraded to 0.7%.
These data fit the narrative that the Q4 GDP portrayed yesterday with the strong rise to 2.8% year on year growth to the end of December 2013 and the comments by RBA Board member John Edwards we reported on this morning about growth having turned the corner.
Looking at the break up, food rose 0.4% seasonally adjusted, household goods leapt 1.5%, clothing and footwear was up 1.1%, and department store sales were an amazing 2.6% higher in January in seasonally adjusted terms.
But it wasn’t just spending at the shops that Australian were doing over summer. Cafes, restaurants and catering rose a stellar 2% in January on a seasonally adjusted basis.
The RBA will be pleased because just like the housing construction data of recent months this is really strong print for retail sales in what has now become a really strong and accelerating trend.
Yesterday’s GDP data showed that the Savings rate has fallen and while consumer confidence measures have fallen back to or below long run averages these data suggest that it’s consumers actions rather than their words that the RBA will be paying attention to in the months ahead.