The Australian Bureau of Statistics (ABS) has released retail sales data for July, which posted strong 1.3% growth in July with sales up 16.5% year-on-year.
The result, which was the largest rise in four months, shattered economists’ expectations of a 0.3% increase:
Retail sales boom in July.
According to Ben Dorber, head of retail statistics at the ABS, “after slowing growth in recent months, the 1.3 per cent rise in July was the largest since the 1.6 per cent rise in March 2022. Turnover rose in five of the six retail industries in July 2022. This shows that, despite cost-of-living pressures, households are continuing to spend.”
Broad increases in retail sales.
The results were surprising given CBA’s internal data showed that discretionary spending has been easing recently on the back of the RBA’s aggressive rate hikes:
CBA: discretionary retail spending easing.
Moreover, Roy Morgan’s Business Confidence survey showed that retail was the most pessimistic industry, with confidence halving over the year to July:
Retail sector confidence halves.
Nevertheless, today’s strong result suggests the RBA will hike rates aggressively next week, with a 0.5% increase all but certain.
