Australian retail sales jumped to the highest in five months in November boosted by pre-Christmas shopping, an indication private consumption bounced in the final quarter of 2018.
Retail sales rose a seasonally adjusted 0.4 percent in November from October, data from the Australian Bureau of Statistics (ABS) showed on Friday, better than economists’ expectations of a modest 0.3 percent rise. October sales were unrevised to show a 0.3 percent gain.
The better-than-expected outcome was enough to send the Australian dollar about 20 pips higher to $0.7205, a level not seen since mid-December.
Household goods retailing and clothing led the rises with gains of 1.2 percent and 1.5 percent, respectively.
“Both of these industries were impacted by strong promotional activity in the November month, including Black Friday sales,” the ABS said.
Even so, Australia’s retail sector faces several headwinds amid a downturn in the country’s once-red hot property market, sluggish wage growth and stratospheric household debt.
In a sign of the times, a string of Australian retailers have gone under recently including Marcs, Pumpkin Patch, Payless Shoes and Roger David while department store Myer has been struggling to turn around.
Just this month apparel retailer Kathmandu posted weaker-than-expected Christmas sales in Australia and New Zealand, disappointing investors who sent its shares to 10-month lows.
Indeed, the Reserve Bank of Australia (RBA) has singled out household consumption as a “continuing source of uncertainty” with wage growth stuck at around 2 percent.
That is one reason it has left interest rates at a record low 1.50 percent since last easing in August 2016.