The ABS has just released retail trade data for September which showed that maybe Australian households are starting to loosen the purse strings after many months of flat data.
Coming in with a seasonally adjusted rise of 0.8% retail sales were double the market expectations of 0.4%. The trend estimate rose 0.3%.
The big riser was Clothing, Footwear and Personal Accessory retailing which rose a stunning 1.3% in trend terms and an amazing 2.5% in seasonally adjusted terms. Could it be the early summer in the northern part of the country?
But then again that has been balanced out by cooler conditions in Victoria and Western Australia so this might be a genuine recovery and a sign that Australians are spending more on themselves.
Likewise department stores were higher up 0.2% in trend terms but a stellar 2.8% in seasonally adjusted terms. Department store sales seem to reinforce the clothing trend.
Food rose 0.4% in seasonal adjusted terms, other retailing was up 1.6% seasonally adjusted but household goods (things like electrical, hardware, furniture and so on) were dragged down by a big fall in hardware and building supplies which fell 1.7% so that overall household goods fell 0.4% in seasonal terms.
Overall this is a solid result and the Aussie dollar climbed to just below 95 cents in the wake of the data.
The market has been looking for signs of an uptick in consumer spending that followed the federal election at the start of September and there have been some frustrations that it didn’t appear to be materialising.
However this is a solid sign of at least a few weeks increased spending by consumers. Whether it will be sustained is the next big question. It could be a sugar hit, spurred by the recent lift in the housing market.
Either way this data confirms monetary policy is starting to get real traction in Australia.
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