Australian retail sales dropped 0.1 percent on a sequential basis in July, as compared with market expectations of a rise of 0.2 percent. Annual growth fell to 2.4 percent. This is the lowest annual growth since January 2018.
Sales contractions were worst in categories that are considered most discretionary, including recreation goods, clothing, dining out and furniture/homewares. This implies that households are tightening their spending throughout non-essentials, said ANZ in a research report.
Today’s negative data implies that it is too early to see the effects of tax cuts, the earliers of which would have been received in mid-July.
“We expect to see stronger retail growth in August, as substantial tax cut refunds are received and spent”, added ANZ.
