The Australian Bureau of Statistics (ABS) released retail sales data for July, which posted a 0.5% rebound following June’s decline.
As shown in the next chart, the value of retail sales has been drifting sideways for nearly a year, rising just 2.2% over the past 12 months:
Given inflation of 6.0% and population growth of around 2.0% over the same period, this means retail sales volumes have fallen heavily.
Indeed, ANZ-observed Australian spending fell 10.4% year-on-year in the first 20 days of August.
The pullback is being felt in the CBDs, with in-store spending down 12% y/y in the nation’s city centres:
The contraction in real retail sales should give the RBA further confidence to keep interest rates on hold.
The 4.0% of accumulated rate hikes is clearly hitting households hard causing them to pull back spending.
