Australia: Mixed retail trade – Deutsche Bank

Phil Odonaghoe, Economist at Deutsche Bank, notes that the Australia’s retail trade rose a better-than-expected 0.6%mom in September after the August print was revised up by 0.1ppts to 0.5%mom.

Key Quotes

“Within the detail for September, the ‘large-store’ (completely enumerated) sub component rose 0.8%mom, following a 1.0%mom rise in August. By category, strength was concentrated in ‘household goods retailing’, which rose 2.4%mom. While the monthly outturn was stronger than expected, a 0.7%qoq rise in the retail trade deflator for Q3 left retail volumes down 0.1% for the quarter.

On the face of it, it appears that the pace of retail activity has picked up in the past two months compared to the softer tone evident through the first half of the year. That said, much of strength this month was concentrated in just one sector (household goods), and we suspect that residual seasonality played a role in the relatively strong August print. Against the backdrop of a fall in volumes in the quarter, we will be watching for signs of a broadening in retail sales strength over coming months to help sort signal from noise.”