Australia: Retail Sales dropped, trade surplus improves - TDS

Analysts at TDS note that Australia’s retail Sales for August dropped -0.6%/m, the largest monthly drop since Mar 2013, the outcome well below expectations for a +0.3%/m rise.

Key Quotes

“Declines were recorded across all states and territories with weakness spread across all categories bar department store sales. The print for July was also revised down from flat to -0.2%, so with July and August data at hand, it does suggest real consumption growth is likely to slow from 0.7%/qtr seen in Q2 GDP. Out of cycle hikes, weak wages growth and rising utility prices could be weighing on consumer spending.”

“In contrast the trade data for Aug showed a A$1b surplus, better than the street forecast for a A$0.85b surplus, thanks to a 0.5%/m rise in value of exports (iron ore prices and volumes picked up), but imports unchanged. The July surplus was also revised up from A$460m to A$800m. These better outcomes suggest that net exports could add more than the 0.3% pts to GDP seen in Q2. Consistent with the weak retail data, consumption imports in July fell -2.4% and dropped 3.7% in August.”