Retail sales plunge to recessionary levels

The Australian Bureau of Statistics (ABS) has released retail sales figures for the month of June, which recorded a 0.4% rise in retail sales over the month in seasonally-adjusted terms, with annual sales growth rising to 2.5%:

However, in trend terms, annual retail sales growth fell to 2.7%.

In real chain volumes terms, annual retail sales plunged to 0.2% – the lowest recorded level since the early-1990s recession:

The below chart maps out nominal seasonally-adjusted sales growth by segment on a monthly, quarterly and annual basis, and shows huge variation:

Annual trend retail sales growth also shows a mixed bag:

The next chart shows seasonally-adjusted retail sales by jurisdiction on a monthly, quarterly and annual basis, which again shows significant variation across the nation:

Annual trend retail sales growth also shows significant variation across jurisdictions:

Finally, there is a reasonably strong correlation between dwelling value growth and retail sales owing to the wealth effect:

The turnaround in the housing market, if it persists, should put a floor under retail sales. However, with wage growth stuck in the gutter, credit availability remaining restricted, and unemployment worsening, the retail sector will remain under intense pressure.

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