Retail Sales Scream Recessionary – If You Look Under The Hood!

We got the January 2024 retail data from the ABS today, and they reported that Australian retail turnover rose 1.1 per cent (seasonally adjusted) in January 2024. This follows a fall of 2.1 per cent in December 2023 and a rise of 1.5 per cent in November 2023.

Economists were divided on what to expect, with some looking for 1.5% monthly rebound, while others like Westpac were expected just a 0.3% rise.

The National Retail Association said the latest trade figures reveal the uphill struggle retailers face in 2024 if consumer sentiment remains low and trade continues to slow, despite Australia’s population boom. While data reveals that retail turnover has stalled, population growth and increasing costs of doing business show retail growth has actually fallen in real terms.

The ABS said “The rebound in January follows a sharp fall in December when consumers pulled back on spending after taking advantage of Black Friday sales in November. Retail turnover is now back at a similar level to September 2023.

But as Westpac notes, the pattern reflects difficulties the ABS is having adjusting for shift in seasonal patterns associated with the increasingly popular ‘Black Friday’ sales. Pinpointing these shifts is difficult and typically requires the accumulation of more months of observations. Volatility is progressively smoothed as this happens – notably today’s release again saw a softer profile through November (initially estimated as a 2% surge) and December (initially reported as a 2.7% drop).

However, this volatility has concealed a material slowing over the three months. On a 3mth basis, nominal retail sales growth has slowed to just 0.5%qtr, 1.4%yr, neither keeping pace with price inflation.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Retail Sales Scream Recessionary - If You Look Under The Hood!
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Retail Sales Scream Recessionary – If You Look Under The Hood!

We got the January 2024 retail data from the ABS today, and they reported that Australian retail turnover rose 1.1 per cent (seasonally adjusted) in January 2024. This follows a fall of 2.1 per cent in December 2023 and a rise of 1.5 per cent in November 2023.

Economists were divided on what to expect, with some looking for 1.5% monthly rebound, while others like Westpac were expected just a 0.3% rise.

The National Retail Association said the latest trade figures reveal the uphill struggle retailers face in 2024 if consumer sentiment remains low and trade continues to slow, despite Australia’s population boom. While data reveals that retail turnover has stalled, population growth and increasing costs of doing business show retail growth has actually fallen in real terms.

The ABS said “The rebound in January follows a sharp fall in December when consumers pulled back on spending after taking advantage of Black Friday sales in November. Retail turnover is now back at a similar level to September 2023.

But as Westpac notes, the pattern reflects difficulties the ABS is having adjusting for shift in seasonal patterns associated with the increasingly popular ‘Black Friday’ sales. Pinpointing these shifts is difficult and typically requires the accumulation of more months of observations. Volatility is progressively smoothed as this happens – notably today’s release again saw a softer profile through November (initially estimated as a 2% surge) and December (initially reported as a 2.7% drop).

However, this volatility has concealed a material slowing over the three months. On a 3mth basis, nominal retail sales growth has slowed to just 0.5%qtr, 1.4%yr, neither keeping pace with price inflation.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Spend More, To Buy Less!

The ugly truth about inflation is households are having to pay more, to buy less.

We have seen this in a number of data points, the most recent is from the UK, where the Office of National Statistics just released their latest data for October. It revealed that UK retail sales fell unexpectedly, adding to the impression that a string of interest-rate hikes designed to beat down inflation is beginning to stymie economic activity.

This is an early indication that overall economic output will probably be weak in the fourth quarter.

Economists were expecting a rise of 0.4% for October. Instead, sales fell to their lowest since February 2021 when Covid restrictions were in place, with retailers citing the cost-of-living crisis and bad weather for the poor performance. It bodes ill for the “golden quarter,” the run-up to Christmas when stores can make a majority of their yearly profits.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Spend More, To Buy Less!

The ugly truth about inflation is households are having to pay more, to buy less.

We have seen this in a number of data points, the most recent is from the UK, where the Office of National Statistics just released their latest data for October. It revealed that UK retail sales fell unexpectedly, adding to the impression that a string of interest-rate hikes designed to beat down inflation is beginning to stymie economic activity.

This is an early indication that overall economic output will probably be weak in the fourth quarter.

Economists were expecting a rise of 0.4% for October. Instead, sales fell to their lowest since February 2021 when Covid restrictions were in place, with retailers citing the cost-of-living crisis and bad weather for the poor performance. It bodes ill for the “golden quarter,” the run-up to Christmas when stores can make a majority of their yearly profits.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Spend More, To Buy Less!
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A Retail Conundrum [Podcast]

The latest from the ABS on retail turnover looked superficially stronger (and again the MSM went to town). But correcting for population growth and inflation it is a different story, and we know some are cutting back hard, while others are spending big on the offers and discount incentives. Nothing here to stop the RBA, in my view.

https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/may-2023

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
A Retail Conundrum [Podcast]
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A Retail Conundrum

The latest from the ABS on retail turnover looked superficially stronger (and again the MSM went to town). But correcting for population growth and inflation it is a different story, and we know some are cutting back hard, while others are spending big on the offers and discount incentives. Nothing here to stop the RBA, in my view.

https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/may-2023

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Credit Growth And Retail Both Slow In December…

The latest credit data from the RBA and APRA, and retail from the ABS provides indicators of easing trends across the economy..

We look at the latest figures.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Hot Spending Says 50 bp In October!

More reasons to argue for a 50-basis point rate hike in October, as the latest provisional retail figures came in pretty strong. Much of this is explained by the inflated prices we are paying for things, but despite very low consumer confidence households continue to spend (even if via credit).

So far higher rates are not slowing the pace, hence another jumbo-sized hike is warranted.

Go to the Walk The World Universe at https://walktheworld.com.au/

Retail Booms: Signals Higher Rates Ahead!

The latest preliminary retail spending figures from the ABS for July 2022 were stronger than expected, showing that despite weaker consumer confidence they are still spending.

That said, the data is not inflation adjusted, and the mortgage rate hikes had hardly begun to flow through. It does leave the RBA open to biggest (50 basis point) rate hikes in September.

Go to the Walk The World Universe at https://walktheworld.com.au/

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What The Latest Numbers Are Telling Us…

We look at the latest from the RBA, APRA, and ABS on credit, retail, and also the US GDP preliminary, which caught many off guard.

https://www.apra.gov.au/news-and-publications/apra-releases-monthly-authorised-deposit-taking-institution-statistics-for-20

https://www.rba.gov.au/statistics/frequency/fin-agg/2021/fin-agg-0921.html

https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/sep-2021

Go to the Walk The World Universe at https://walktheworld.com.au/