Retail spending rose 0.4 per cent in August in a sign that rate cuts and tax offsets could finally be lifting household consumption, even if the rebound was weaker than expected.
Total seasonally adjusted retail spending rose to $27.55 billion for the month, according to Australian Bureau of Statistics data released on Friday, led by a 1.8 per cent rise in clothing, footwear and personal accessory retailing, and a 1.1 per cent rise for department stores.
A 0.1 per cent retail decline in July was upwardly revised on Friday to reflect a flat result, however the 0.4 per cent August rise missed consensus forecasts of a 0.5 per cent rebound.
The data was hotly anticipated as policymarkers search for any sign whatsoever recent stimulus measures are having an impact on the flagging economy.
The Reserve Bank cut the cash rate to a new record low 0.75 per cent on Tuesday after its previous two attempts to lower the cost of borrowing appeared to yield nought but an increase in property prices.
BIS Oxford Economics chief economist Sarah Hunter said more time was needed before a link between the stimulus and rising retail spend can be declared.
“This may be the first tentative sign that the government’s tax cut is having a positive impact, but we’ll need to wait another couple of months to be sure – the data is quite volatile month-to-month,” Dr Hunter said.
The Australian dollar fell from 67.55 US cents to 67.49 US cents immediately after the release of the data, and was worth 67.54 at 1155 AEST.
AAP
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