By James Glynn
SYDNEY–Australian retail sales surged in September as consumers flocked to the shops, and the sharp increase could argue in favor of a further interest-rate rise next month.
Retail turnover rose 0.9% in September, easily beating the 0.3% increase expected by economists. The jump follows a 0.3% rise in August and a 0.6% gain in July, the Australian Bureau of Statistics said Monday.
A warmer-than-usual start to spring lifted sales at department stores and household goods and clothing retailers, with more spending on hardware, gardening and clothing items, the ABS said.
The release of a new iPhone model and the introduction of government rebates to help offset surging electricity costs for households also supported spending, it added.
The rise in consumer spending follows recent news that inflation was stronger than expected in the third quarter, prompting many economists to predict that the Reserve Bank of Australia will end a lengthy period of no action to raise the official cash rate further next month.
But while the jump in spending in September was the largest since January, spending more broadly remained weak, with retail turnover in trend terms up only 1.5% compared with a year ago, which is the smallest trend growth over 12 months in the history of the data series, the ABS said.
The RBA has said it was uncertain how consumers would respond to aggressive interest-rate increases since May last year given that household savings were sharply elevated in the wake of the pandemic.
Surging immigration is also adding to demand across the economy.
Most areas of retail recorded gains in sales in September.
Department stores saw sales rise by 1.7%, followed by household goods retailing, which climbed 1.5%. Sales of clothing, footwear and personal accessories were also solid, the ABS said.
Write to James Glynn at [email protected]
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