Retail sales surprise
Wednesday, October 3, 2007/
Retail sales have come in well above market expectations for the second consecutive month, with a seasonally adjusted 0.7% increase in sales for August – almost double the 0.4% growth expected.
And small retailers appear to have outpaced their larger competitors, with small retailers increasing revenue in original terms by 3.5% compared to just 1.1% for larger retailers and chains.
All states and territories enjoyed increases, with 2.2% growth in the Australian Capital Territory and 1.3% in Tasmania the two largest.
The ongoing strength of retail sales is one of the reasons many think that the Reserve Bank of Australia will have to increase interest rates before the end of this year. For the moment, however, rates have stayed on hold, with the RBA announcing today that it has decided to maintain the cash rate at 6.5%.