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Money Australian retail sales were terrible in March, and they may have been even worse in April

20:11  16 may  2018
20:11  16 may  2018 Source:   businessinsider.com.au

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Australian retail sales were unchanged in March , a disappointing outcome after a solid increase in February. New data from the NAB points to the likelihood that sales fell in April . Australian wage growth is weak, crimping the ability of households to spend.

HomeMIS analysisAustralian retail sales stall . Posted on May 7, 2018. Australian retail sales were flat in March as higher spending on food offset weakness in all other categories.

National Australia Bank sign and logo.© Getty Images National Australia Bank sign and logo. In the minutes of its May monetary policy meeting, the Reserve Bank of Australia (RBA) board noted that "household consumption had grown solidly over 2017, and recent data on retail and motor vehicle sales, as well as information from the Bank’s liaison, suggested that this momentum had continued in early 2018".

It added that "consumption had been relatively resilient to the slower growth in household income over recent years".

Well, that view may need a tweak, at least when it comes to retail sales, accounting for around a third of household consumption.

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Gas and auto retailers fare worst as sales fall 0.3% in May . The reversal last month unwound much of the strength in April when sales jumped 0.4%. If autos and gas are set aside, retail sales were unchanged in May , the Commerce Department said.

The latest official retail sales figures from the Office for National Statistics showed sales volumes were down 1.2% in March , when unusually harsh weather kept consumers away from the shops. Retailers are now hoping that the royal wedding later in May and the World Cup in June and July will boost

Not only were retail sales flat in March, according to data from the Australian Bureau of Statistics (ABS), there's now a good chance that sales may have fallen in April.

According to the National Australia Bank's (NAB) cashless retail sales index, the value of electronic transactions processed through the bank's platform fell heavily last month, declining by 0.6%.

It was the first decline reported since December last year.

"Generally most sectors were weak in April, with only cafes, restaurants and takeaway and department stores recording a month on month gain," said Alan Oster, chief economist at the NAB. "Food recorded the weakest result, followed by clothing and footwear."

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  The Australian dollar fell back under US75 cents after retail sales stalled Australian retail sales stalled in March, coming in flat against forecast monthly growth of 0.2%. Quarterly retail sales also missed the mark, with growth of just 0.2% for the three months to March -- less than the 0.5% forecast.Currency markets have reacted and the Australian dollar is back under US75 cents for the first time in a week.Here's the price action on a five-minute chart:© Provided by Business Insider Inc AxiTrader's Greg McKenna told BI that last week's low of 0.7472 US cents now marks a key support level for the Aussie."In the very short term, yesterday’s low around 0.

Australian retail sales were terrible in March , and they may have been even worse in April (via @BIAUS) https Fossil fuel agents spread a false narrative that we can’t power our lifestyles with 100% clean energy They are wrong Even steelmaking, a high CO2-emitting industry, can do it: New

May retail sales for Australia are out and it is a terrible number. Sales fell 0.5% month-on-month, seasonally adjusted. But the key point about this data is that May 's decline in sales comes on top of a 0.1% fall in April and a flat result in March .

Given the reasonable relationship that exists between the NAB index and figures reported by the ABS, Oster says the decline does not bode well for Australia's official retail sales report released in two weeks time.

"Our mapping of the official ABS measure points to a fall of 0.2%," he says.

"This is the first drop since December 2017, which followed a very strong November. More concerningly, the April result comes after a flat ABS read in March."

So after coming in flat in March, retail sales may have deteriorated further last month.

The relationship between the NAB index and the ABS measure of retail sales is shown in the chart below.

a screenshot of a cell phone© Provided by Business Insider Inc

It's not perfect by any stretch, but it's still a fairly reliable guide on what to expect, especially given alternate reports that suggest conditions in Australia's retail sector are weak.

"While the monthly data are volatile, our latest Australian Business Survey also showed retail business conditions turning negative in April for the first time this year, further suggesting that the retail sector is losing momentum again," Oster said.

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Sales at retailers nationwide declined 0.2% last month, mostly because of cheaper gas and incentives by car dealers to drum up sales . Slower-than usual issuances of tax refunds may have also contributed to weaker spending in the early spring. What made the decline seem even worse , though, was a

4.37 am EDT 04:37 UK retail sales surge in April . 3.48 am EDT 03:48 French jobless rate falls. 3.30 am EDT 03:30 Royal Mail profits fall but shares rise. But after their worst day since September, the falls have been fairly limited and could easily be reversed. The Dow Jones Industrial Average is currently

The NAB index is derived from around 2 million personal transactions per day using the bank's NAB platforms, including spending by consumers using debit and credit cards, BPAY and Paypal.

The bank says it is "reasonably assumed to be representative of aggregate non-cash retail sales in Australia given its large sample size".

Reflective of broader trends in cashless spending across Australia, in other words.

While we will have to wait until early June to receive Australia's official retail sales report, if sales have declined, it would be a concerning development, particularly after sales were flat in March.

Perhaps helping to explain why sales remain weak compared to prior periods, Australian wage growth -- the largest source of household income for many families -- remains incredibly weak, lifting by just 2.07% in the year to March, barely ahead of inflation.

For those in the private sector, the largest employer in Australia, real wage growth was flat over the year, crimping the ability for households to lift spending levels.

"With households under pressure from low wage growth and a slowing housing market, and tax cuts unlikely to boost incomes until the second half of 2019, we expect consumption growth will slow to around 2.0% by the end of this year, says Kate Hickie, Australia and New Zealand economist at Capital Economics, following the release of the latest Westpac-MI Australian consumer sentiment report today.

The headline confidence index fell marginally to 101.8, largely reflecting a sharp deterioration in sentiment towards current family finances.

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Toys 'R' Us Australia has appointed voluntary administrators, with an uncertain future for 700 staff and 44 stores nationwide. It follows the collapse the franchise in the US and other countries. Toys 'R' Us Australia has gone into administration, putting 700 jobs in 44 stores around the country at risk, after a plan to sell the company fell apart. It follows the collapse of the Toys 'R' Us chain in the US, where the company filed for bankruptcy protection in March and started the process of closing its 735 stores across America.

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