As normal we look at the trend series which smooths out the bumps.
The trend estimate rose 0.4% in February 2018. This follows a rise of 0.3% in January 2018 and a rise of 0.3% in December 2017.
In trend terms, Australian turnover rose 2.7% in February 2018 compared with February 2017. This is faster than wages growth or inflation.
The following industries rose in trend terms in February 2018: Food retailing (0.3%), Household goods retailing (0.6%), Other retailing (0.4%), Cafes, restaurants and takeaway food services (0.4%), and Clothing, footwear and personal accessory retailing (0.4%). Department stores (-0.2%) fell in trend terms in February 2018.
All the states and territories rose in trend terms in February 2018: Victoria (0.6%), New South Wales (0.3%), Queensland (0.3%), South Australia (0.3%), Western Australia (0.1%), Tasmania (0.2%), the Australian Capital Territory (0.1%), and the Northern Territory (0.2%).
The trends by state over time highlight the relative strength of Victoria, compared with the national average and several other states who are performing much less well, especially those in the mining heavy states.
Given the state of the housing market, we wonder if the slight improvement is sustainable, we will see. We do know that households are raiding their savings to support their spending habits. This can only continue until savings are depleted as the savings ratio falls further.
The trend estimate for Australian retail turnover rose 0.3 per cent in January 2018 following a rise (0.3 per cent) in December 2017. Compared to January 2017, the trend estimate rose 2.3 per cent according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.
Retail turnover rose 0.1 per cent in January 2018, seasonally adjusted. This follows a 0.5 per cent fall in December 2017.
“There were offsetting movements by industry with rises in other retailing (1.0 per cent), household goods retailing (0.1 per cent), and cafes, restaurants and takeaways (0.1 per cent) being offset by falls in clothing, footwear and personal accessories (-0.7 per cent) and department stores (-0.6 percent),” Ben James, Director of Quarterly Economy Wide Surveys at the ABS, said. “Food retailing was relatively unchanged (0.0 per cent).” In seasonally adjusted terms, there were rises in Queensland (0.4 per cent), Victoria (0.3 per cent), Western Australia (0.3 per cent), and Tasmania (0.3 per cent). The Australian Capital Territory was relatively unchanged (0.0 per cent). New South Wales (-0.2 per cent), South Australia (-0.6 per cent), and the Northern Territory (-0.5 per cent) fell in seasonally adjusted terms.
Online retail turnover contributed 4.7 per cent to total retail turnover in original terms in January 2018. In January 2017, online retail turnover contributed 3.6 per cent to total retail.
Australian retail turnover fell 0.5 per cent in December 2017, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures. This follows a 1.3 per cent rise in November 2017.
This is the headline which will get all the coverage, but the trend estimate rose 0.2 per cent in December 2017 following a rise of 0.2 per cent in November 2017. Compared to December 2016 the trend estimate rose 2.0 per cent. This is in line with average income growth.
We will continue to focus on the trend data, as this gives a clearer indication of underlying performance. Retail remains in the doldrums, no surprise given the pressure on households, as we discussed yesterday.
Across the states, trend movements from the previous month was 0.1% in NSW, 0.5% in VIC, 0.1% in QLD, 0.6% in SA, 0.0% in WA, 0.2% in TAS, -0.2% in NT and no change in the ACT.
By category, in trend terms, food retailing rose 0.3%, household goods 0.2%, Clothing, footwear and personal accessories 0.5%, department stores 0.1%, other retailing -0.2% and cafes, restaurants and takeaway food 0.4%.
Online retail turnover contributed 4.8 per cent to total retail turnover in original terms in the December month 2017. In December 2016 online retail turnover contributed 3.8 per cent to total retail.
In seasonally adjusted volume terms, turnover rose 0.9 per cent in the December quarter 2017, following a rise of 0.1 per cent in the September quarter 2017. The rise in volumes was led by household goods (3.4 per cent), which benefitted from strong promotions and the release of the iPhone X in the November month.
Australian retail turnover rose 1.2 per cent in November 2017, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures. Black Friday and iPhone X sales drove the outcome says the ABS. This follows a 0.5 per cent rise in October 2017. Some will spruke this as a positive sign.
However the more reliable trends are less positive, with the trend estimate for Australian retail turnover up 0.1 per cent in November 2017 following a rise (0.1 per cent) in October 2017. Compared to November 2016 the trend estimate rose 1.7 per cent. This is still weak, reflecting stagnant wage growth, rising costs and high levels of debt.
The state trend data showed NSW, ACT and QLD had no change, NT fell 0.2% along with WA, while VIC rose 0.3% and SA 0.4%, and TAS rose 0.2%.
“In seasonally adjusted terms, rises were led by the household goods (4.5 per cent) and other retailing (2.2 per cent) industries,” the Director of the Quarterly Economy Wide Surveys, Ben James, said. “Seasonally adjusted sales in both these industries are influenced by the release of the iPhone X and the increasing popularity of promotions in November, including Black Friday sales.”
There were also rises for clothing, footwear and personal accessory retailing (1.6 per cent) and cafes, restaurants and takeaways (0.4 per cent). Department stores fell (-1.1 per cent) whilst food was unchanged in November 2017.
In seasonally adjusted terms, all states rose. There were rises in Victoria (1.8 per cent), New South Wales (1.0 per cent), Western Australia (1.4 per cent), Queensland (0.7 per cent), South Australia (1.5 per cent), Tasmania (1.8 per cent), the Australian Capital Territory (1.2 per cent) and the Northern Territory (0.2 per cent).
Online retail turnover contributed 5.5 per cent to total retail turnover in original terms. This is the largest contribution to total retail turnover from online sales in the history of the online series.
According to the ABS, the trend estimate for Australian retail turnover fell 0.1 per cent in October 2017 following a relatively unchanged estimate (0.0 per cent) in September 2017. Compared to October 2016 the trend estimate rose 1.8 per cent. Trend estimates smooth the statistical noise.
Food retailing rose 0.1% in trend terms, Housing good retailing fell 0.6%, Clothing and footwear fell 0.1%, Department stores rose 0.2% and cafes and food services rose 0.1%.
Looking across the states, again in trend terms, NSW and VIC both fell 0.1%, WA fell 0.3%, NT fell 0.4% and ACT fell 0.2%. SA was the only state to register a rise, of 0.1%.
Online retail turnover contributed 4.7 per cent to total retail turnover in original terms.
For the record, Australian retail turnover rose 0.5 per cent in October 2017, seasonally adjusted, and follows a 0.1 per cent rise in September 2017.
In seasonally adjusted terms, all states rose. There were rises in Victoria (1.0 per cent), New South Wales (0.3 per cent), South Australia (1.2 per cent), Western Australia (0.5 per cent), Queensland (0.1 per cent), the Northern Territory (1.7 per cent), the Australian Capital Territory (0.6 per cent) and Tasmania (0.5 per cent).
The trend estimate for Australian retail turnover was relatively unchanged (0.0 per cent) in September 2017 and relatively unchanged (0.0 per cent) in August 2017. Compared to September 2016 the trend estimate rose 2.0 per cent.
In seasonally adjusted terms, there were rises in food retailing (0.6 per cent), department stores (2.1 per cent), and cafes, restaurants and takeaway food services (0.3 per cent). There were falls in other retailing (-1.7 per cent), household goods retailing (-0.4 per cent), and clothing, footwear and personal accessory retailing (-0.7 per cent) in September 2017. This follows a seasonally adjusted fall of -0.5 per cent in August 2017.
In trend terms, there were falls in WA, NT and ACT. NSW had a 0.1% rise compared to last month.
In seasonally adjusted terms, there were rises in New South Wales (0.2 per cent), Queensland (0.3 per cent), South Australia (0.7 per cent), Tasmania (0.6 per cent), and the Australian Capital Territory (0.1 per cent). There were falls in Western Australia (-1.3 per cent), and the Northern Territory (1.7 per cent). Victoria was relatively unchanged (0.0 per cent).
Online retail turnover contributed 4.4 per cent to total retail turnover in original terms.
In seasonally adjusted volume terms, turnover rose 0.1 per cent in the September quarter 2017, following a rise of 1.5 per cent in the June quarter 2017. “The main contributor to the quarterly volume rise was food retailing (0.9 per cent) but there was also rises in clothing, footwear and personal accessory retailing (0.7 per cent) and other retailing (0.4 per cent),” said Ben James, the Director of Quarterly Economy Wide Surveys. “A fall in Household goods retailing (-1.6 per cent) offset these rises.”
Prime Minister Malcolm Turnbull has blamed low wage growth for the worst monthly drop in consumer spending since 2010.
Retail turnover in August declined for a second month in a row, according to official data released on Thursday, with the -0.6 per cent drop in trade the worst monthly performance in more than four years – putting economic growth at risk.
“While we’re seeing strong growth in employment, we’re yet to see stronger growth in wages so people feel as though they’re not getting ahead,” Mr Turnbull told Neil Mitchell on 3AW radio on Friday.
“That’s why economic growth is so important.”
The Prime Minister said wages would naturally rise as unemployment falls. “It’s supply and demand. Phil Lowe, the Governor of the Reserve Bank, was making this point just the other day,” he said.
Mr Turnbull also blamed higher energy bills, while some economists pointed the finger of blame at rising household debt and cooling house prices.
August retail trade slumped the most at ‘Newspaper and book retailing’, down -2.3 per cent; ‘Cafes, restaurants and catering services’, down -1.8 per cent; and at ‘Electrical and electronic goods retailing’, down -1.6 per cent.
Nowhere in Australia escaped, with retail sales falling in every state and territory, with New South Wales, Victoria and the ACT tied for worst performance at -0.8 per cent.
It was the worst month-on-month result, in seasonally adjusted terms, in four years. Source: ABS
The link between low wage growth, low spending and low economic growth has been a growing area of concern in recent months.
Commonwealth Bank CEO Ian Narev said in a speech on Friday that wage growth was the “No.1 metric” that policymakers should be concerned about.
The reason experts are so concerned is that any drop in consumer spending from cash-poor workers could have big consequences for economic growth, as household consumption currently accounts for roughly 57 per cent of Australia’s economic growth.
The full impact of the August slump will be seen when the September quarter GDP figures are released. In the GDP figures for the June quarter, the share of economic growth flowing to wage earners fell to 51.3 per cent in trend terms, the lowest since 1964, while the profit share soared to 27.3 per cent, the highest since 2012.
Dr Richard Holden, an economist at the University of New South Wales, has previously warnedThe New Daily that a drop in consumer spending “goes round in a vicious cycle”.
“If you have more of a drop on consumer spending, you’re going to see a contraction on the business side. It flows straight into business investment and business expansion, and that has a multiplier effect,” Dr Holden said at the time.
Commonwealth Bank economist Gareth Aird has described the August retail report as a “shocker”.
“It’s not surprising to see such weak retail trade outcomes given household income growth is so soft. But two consecutive monthly falls look at odds with the recent strength in the labour market.”
Mr Aird also said mortgage interest payments are taking up a larger proportion of household income, acting as “a handbrake on consumer spending and the retail sector in general”.
The expected arrival of online giant Amazon, and the growth of online retail in general, is also putting pressure on retailers, he said.
Australian Retailers Association executive director Russell Zimmerman blamed increased energy costs, higher tax burdens and an inflexible wage system for the concerning result and called for government action to lift confidence.
JP Morgan economist Ben Jarman said further weakness in household consumption would put at risk the Reserve Bank’s forecasts for a return to economic growth of 3 per cent, from the current annual rate of 1.8 per cent.
“The consumption data challenge the RBA’s assertion that growth will move back above potential,” he said.
Labor leader Bill Shorten told a media conference on Friday that the misuse of labour hire contracts were a major contributing factor to Australia’s low wage growth.
Australian retail turnover fell 0.6 per cent in August 2017, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures. This follows a fall of 0.2 per cent in July 2017.
In seasonally adjusted terms, there were falls in food retailing (-0.6 per cent), cafes, restaurants and takeaway food services (-1.3 per cent), household goods retailing (-1.0 per cent) and clothing, footwear and personal accessory retailing (-0.2 per cent). There were rises in department stores (0.7 per cent) and other retailing (0.1 per cent) in August 2017.
In seasonally adjusted terms, there were falls in all states and territories. “Victoria (-0.8 per cent) and Queensland (-0.8 per cent) led the falls,” said Ben James, Director of Quarterly Economy Wide surveys.
“There were also falls in New South Wales (-0.2 per cent), Western Australia (-0.6 per cent), South Australia (-0.6 per cent), the Australian Capital Territory (-0.8 per cent), Tasmania (-0.7 per cent) and the Northern Territory (-0.7 per cent).”
The trend estimate which irons out the bumps was a little more sanguine, with retail turnover rising 0.1 per cent in August 2017 following a 0.1 per cent rise in July 2017. Compared to August 2016, the trend estimate rose 2.8 per cent.
Some significant state variations, but overall direction is clearly down.
Online retail turnover contributed 4.6 per cent to total retail turnover in original terms.
More evidence of stressed household budgets, which is no surprise given the current economic settings.
Australian retail turnover was arelatively unchanged 0.0 per cent in July 2017, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.
This follows a rise of 0.2 per cent in June 2017.
In seasonally adjusted terms, there were falls in household goods retailing (-1.7 per cent), department stores (-2.8 per cent) and clothing, footwear and personal accessory retailing (-0.2 per cent). There were rises in food retailing (0.7 per cent), other retailing (1.3 per cent), and cafes, restaurants and takeaway food services (0.2 per cent) in July 2017.
“The falls in household goods retailing and department stores come after strong rises during the June quarter,” said Ben James, Director of Quarterly Economy Wide surveys for the ABS.
In seasonally adjusted terms, there were falls in New South Wales (-0.4 per cent), South Australia (-0.8 per cent), Tasmania (-0.9 per cent) and the Northern Territory (-0.1 per cent). There were rises in Victoria (0.4 per cent), Western Australia (0.6 per cent), Queensland (0.2 per cent) and the Australian Capital Territory (0.1 per cent).
The trend estimate for Australian retail turnover rose 0.3 per cent in July 2017 following a 0.4 per cent rise in June 2017. Compared to July 2016, the trend estimate rose 3.5 per cent.
Online retail turnover contributed 4.3 per cent to total retail turnover in original terms.
The trend estimate for Australian retail turnover rose 0.4 per cent in June 2017 following a 0.4 per cent rise in May 2017. Compared to June 2016, the trend estimate rose 3.6 per cent, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.
In seasonally adjusted terms, Australian retail turnover rose 0.3 per cent in June 2017 , following a rise of 0.6 per cent in May 2017.
“In seasonally adjusted terms in June 2017, we saw rises in Household goods retailing (0.9 per cent), Cafes, restaurants and takeaway food services (0.5 per cent), Clothing footwear and personal accessory retailing (0.8 per cent) and Other retailing (0.2 per cent),” said Ben James, Director of Quarterly Economy Wide Surveys. “There was a fall in Department stores (-0.3 per cent), while Food retailing (0.0 per cent) was relatively unchanged.”
The trend by state shows Tasmania and ACT ahead of the average, with Western Australian and NT, continuing to trail.
In seasonally adjusted terms there were rises in New South Wales (0.5 per cent), Queensland (0.7 per cent), South Australia (0.3 per cent), Tasmania (0.6 per cent), the Northern Territory (1.2 per cent) and Western Australia (0.1 per cent). There were falls in Victoria (-0.3 per cent) and the Australian Capital Territory (-0.1 per cent).
Online retail turnover contributed 4.1 per cent to total retail turnover in original terms.
In seasonally adjusted volume terms, turnover rose 1.5 per cent in the June quarter 2017, following a rise of 0.2 per cent in the March quarter 2017. The largest contributor to the rise was Household goods retailing, which rose 2.5 per cent in seasonally adjusted volume terms in the June quarter 2017.
All the states and territories rose in trend terms in February 2018: Victoria (0.6%), New South Wales (0.3%), Queensland (0.3%), South Australia (0.3%), Western Australia (0.1%), Tasmania (0.2%), the Australian Capital Territory (0.1%), and the Northern Territory (0.2%).
The trends by state over time highlight the relative strength of Victoria, compared with the national average and several other states who are performing much less well, especially those in the mining heavy states.
Given the state of the housing market, we wonder if the slight improvement is sustainable, we will see. We do know that households are raiding their savings to support their spending habits. This can only continue until savings are depleted as the savings ratio falls further.
