Analysts at Australia and New Zealand Banking Group (ANZ) provide their afterthoughts on the Australian monthly Retail Sales data.

Key quotes

“Retail sales came in stronger than expected, rising 0.5% m/m in July. Though this was not enough to recover the 0.8% m/m loss in June. Despite rapid inflation, there’s been little growth in monthly retail sales throughout 2023, with the series only up 0.9% since January.”

“The underlying trend in retail sales along with our ANZ-observed spending data shows households are clearly cutting back. Consumer confidence is also very weak, and the fixed rate roll-off means more household budgets are being squeezed by high rates and inflation.”

“We think households will continue to tighten their spending throughout 2023. We do, however, see some upside to spending in 2024 as inflation moderates and real household incomes turn positive.”