Yahoo Finance Australia Retail Sales Rise as Expected in September
By Ambar Warrick
Investing.com-- Australian retail sales grew as expected in September, data showed on Monday, as strength in the jobs markets kept shoppers spending on food and dining out despite inflation touching a 32-year high.
Retail sales rose 0.6% in September, data from the Australian Bureau of Statistics (ABS) showed. The figure was in-line with expectations, and also remained steady from August’s reading of 0.6%.
The rise marks a ninth consecutive month of gains for retail sales, with the relaxation of most COVID-linked restrictions this year also spurring a bounceback in spending. Robust spending is one of the key drivers of Australian economic growth this year.
Shoppers spent the most on the food industry in September, while clothing retailing also bounced back from a large fall in August. But spending on more expensive items, such as household goods, weakened in the month after a big rise in August.
Spending was also largely supported by strength in the jobs market. Australian unemployment sank to a nearly 50-year low this year, while more than two-thirds of the population participated in the jobs market as of last month.
This helped offset headwinds to spending from rising inflation. The Australian CPI index hit a 32-year high in the third quarter, driven by rising accommodation and fuel costs.
The reading is likely to invite more interest rate hikes by the Reserve Bank, and shows that a decision by the central bank to taper its pace of rate hikes may have been premature.
The Reserve Bank earlier in October hiked rates by a smaller-than-expected margin, stating that it intends to strike a balance between curbing inflation and generating economic headwinds with higher lending rates.
But strength in retail spending may give the Reserve Bank enough economic headroom to keep raising interest rates at a sharp pace. This could also be positive for the Australian dollar in the near-term.
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