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Matthew Hassan, senior economist at Westpac, points out that the Australia’s June retail report showed a slightly better than expected monthly gain but a slightly weaker than expected result for June quarter sales volumes.

Key Quotes

“The most eye-catching figure however is the annual growth rate in retail volumes – at just 0.2%yr, growth over the last 12 months has been weaker than during the GFC, running at its slowest pace since the early-90s recession.”

“Monthly sales were reasonable for the June month, posting a a 0.4% gain, beating expectations of a 0.3% rise and marking the best result since Feb. That said, the detail suggests some of this may be price-related rather than volume driven with a 2% rise in sales for the clothing and footwear storetype notable given the surprising strength of clothing price gains in the Q2 CPI (up 1.6%qtr).”

“The wider price-volume split for the June quarter was broadly in line with expectations. Real retail sales rose 0.2%qtr, a touch below expectations of a 0.3% gain and a dismal pace overall. Nominal sales rose 0.6% for the quarter, with 0.4% of the gain due to higher retail prices. The gain in prices was a little more muted than the 0.8% and 0.7% rises in Q1 and Q2, the main difference being around food prices, as expected.”