Department store turnover dipped a seasonally adjusted 1.3% in July, as total retail trade declined 0.1%, according to ABS figures released this morning.
This follows unchanged retail trade in June, and a 0.1% rise in May.
The dip in retail trade wasn’t reflected evenly across all industries. Cafes and restaurants saw their trade go up 0.2% in seasonally adjusted terms in July, while food retailing rose 0.1%. Household goods retailing also had a modestly good month – up 0.1% – while clothing, footwear and personal accessories store saw 0.3% more spend.
Most of Australia’s most populous states saw retail trade dip overall. New South Wales was down 0.2%, Victoria down 0.1%, and Western Australia was also down 0.1%. Queensland was unchanged, while South Australia, the Northern Territory and Tasmania rose 0.6%, 0.4% and 0.1% respectively.
RBA expected to hold rates steady
Economists polled by major news organisations are unanimous in their expectations that interest rates will be kept on hold when the RBA meets later this afternoon.
HSBC chief economist Paul Bloxham’s comments to News Limited were typical of others published today in the major newspapers.
“Financial conditions are now fairly loose in Australia with the cash rate at its lowest level in 53-years and with the Australian dollar now largely doing its job, the RBA is likely to see that it has met the preconditions for a rebalancing of growth,” he said.
“Plus the RBA will likely soon start to worry that low rates may overinflate the housing market, an area where conditions are improving. We expect the RBA to hold the cash rate steady.”
The one area of disagreement was around whether or not the election would play into the RBA’s decision.
JP Morgan chief economist Stephen Walters said given the RBA had cut interest rates last month to 2.5%, another cut during an election campaign would be seen as politically-motivated.
“Back-to-back monthly moves would be unnecessarily bold in the midst of a federal election campaign,” he said.
However, Commonwealth Bank senior economist Michael Workman told the ABC that he didn’t believe the election cycle would have any impact on the RBA’s decision-making.
Markets rally as Syrian fears recede
The Australian sharemarket posted modest gains this morning on the back of positive leads from European bourses.
Wall Street was closed yesterday for America’s Labor Day holiday, but European markets ended Monday strongly over reduced concerns over Syrian and stronger-than-expected Chinese manufacturing data. The FTSE100 rallied 1.45% while the Euro Stoxx Index jumped 1.94%.
At midday today, the ASX200 had cemented its gains yesterday, adding a further 0.16% on the 1.04% it rose yesterday. The index now stands at 5196.5.
The broader All Ordinaries index rose 0.19% to 5188.
Financial and resource stocks are mostly trading in the black this morning, while retail stocks are mixed. Wesfarmers and Woolworths are both in the red, while Myer and David Jones have risen 1.42% and 0.7% respectively.
Overnight, the Australian dollar rose slightly to $US0.87.