Australia | Aug 02 2006
By Greg Peel
Despite the May interest rate rise, and despite those higher petrol prices, Australians still managed to throw their money around in June. Retail trade rose by 1.0% to be up 5.6% for the past year.
Was it because of upcoming tax cuts? Was it to get in ahead of further inflation? Or has the concept of household budgeting simply gone out the window? While April was also strong, the May number was slightly negative – no downward trend is apparent.
The Commonwealth Bank suggests cautious optimism is still required on the retail front, however. We are another month ahead and have just received another rate rise. Anecdotal comments from retailers currently suggest the mood is souring.
Not surprisingly, Queensland (7.8%) and Western Australia are leading the charge amongst the states on a twelve-month basis while NSW (4.0%) is dragging the chain. Top-enders have gone simply berserk, the NT registering 11.6%. That’s a lot of beer.
A breakdown of the twelve-month figure shows food (7.6%), pharmaceutical (8.2%) and hospitality (7.5%) have been the recipients of our hard-earneds, while we’ve backed off on recreational goods (-3.7%) and department store items (-1.0%).
CommBank notes the inflation-adjusted quarterly data show a June quarter rise of 0.6% to 3.6% for the year. This is the highest the annual growth rate has been since late 2004. Most significantly, the quarterly "retail inflation" figure rose 1.1% to be 2.3% for the past year.
This figure, says CommBank, is an indicator of general inflation trends, so you know where that’s taking us. The market is getting set for yet another rate rise this year, probably in November.
TD Securities believes the odds remain "heavily tilted" towards another rate rise. This could take the Aussie up to US$0.80, says TD’s Stephen Koukoulas. A solid GDP growth rate is also anticipated for the June quarter, although we have to wait till September to find out.
ANZ believes we will need to see lower subsequent retail figures to sway the RBA away from another rate rise.
By Greg Peel
By Greg Peel
Despite the May interest rate rise, and despite those higher petrol prices, Australians still managed to throw their money around in June. Retail trade rose by 1.0% to be up 5.6% for the past year.
Was it because of upcoming tax cuts? Was it to get in ahead of further inflation? Or has the concept of household budgeting simply gone out the window? While April was also strong, the May number was slightly negative – no downward trend is apparent.
The Commonwealth Bank suggests cautious optimism is still required on the retail front, however. We are another month ahead and have just received another rate rise. Anecdotal comments from retailers currently suggest the mood is souring.
Not surprisingly, Queensland (7.8%) and Western Australia are leading the charge amongst the states on a twelve-month basis while NSW (4.0%) is dragging the chain. Top-enders have gone simply berserk, the NT registering 11.6%. That’s a lot of beer.
A breakdown of the twelve-month figure shows food (7.6%), pharmaceutical (8.2%) and hospitality (7.5%) have been the recipients of our hard-earneds, while we’ve backed off on recreational goods (-3.7%) and department store items (-1.0%).
CommBank notes the inflation-adjusted quarterly data show a June quarter rise of 0.6% to 3.6% for the year. This is the highest the annual growth rate has been since late 2004. Most significantly, the quarterly "retail inflation" figure rose 1.1% to be 2.3% for the past year.
This figure, says CommBank, is an indicator of general inflation trends, so you know where that’s taking us. The market is getting set for yet another rate rise this year, probably in November.
TD Securities believes the odds remain "heavily tilted" towards another rate rise. This could take the Aussie up to US$0.80, says TD’s Stephen Koukoulas. A solid GDP growth rate is also anticipated for the June quarter, although we have to wait till September to find out.
ANZ believes we will need to see lower subsequent retail figures to sway the RBA away from another rate rise.