Australia retail sales inch up 0.1% in April

Australian retail sales in April increased by 0.1 per cent following a 0.4 per cent decline in March, falling short of analysts’ expectations of a 0.2 per cent rise, Reuters reported citing data from the Australian Bureau of Statistics (ABS) on Monday.

Total retail sales for April reached A$35.7 billion ($23.78 billion), representing a sluggish 1.3 per cent increase year-on-year. This growth is particularly weak considering Australia’s population is expanding by more than 2 per cent annually.

In fact, sales volumes per capita have been falling for seven consecutive quarters, a pattern typically associated with recessions.

High borrowing costs, rising mortgage rates, and increasing rents are dampening consumer spending. In addition, expenses for services like insurance, education, healthcare, and electricity are rising faster than prices for goods.

This ongoing service inflation is a key factor in the Reserve Bank of Australia’s decision to hold interest rates steady this year. Futures markets suggest a 30 per cent chance of a 0.25 per cent rate cut by December, with a full easing not expected until May 2025.

April consumer price data will be released on Wednesday, with analysts predicting a slight decrease in annual inflation to 3.4 per cent from March’s 3.5 per cent. Despite upcoming tax cuts in July, most households are planning to save the extra income, according to surveys.