Australian Retail Sales Rise at Slower Pace as Lockdown Drags
(Bloomberg) -- Australian household spending rose at a slower-than-expected pace in January as a short, sharp Covid-19 lockdown in the northeastern state of Queensland dragged on stronger performances in other parts of the country.
Preliminary retail sales advanced 0.6% from December, but came in below economists’ median estimate of a 2% gain, the Australian Bureau of Statistics said in a report released in Sydney Friday. Queensland dropped 1.5% last month, while New South Wales advanced 1%.
“There continues to be variations in retail sales between states and territories, as Covid-19 restrictions are tightened or eased,” said Ben James, an official at the ABS. “All states and territories rose in January, except Queensland, where a three-day lockdown impacted trade. NSW led the rises, as restrictions that began in December were eased during January.”
Australians are cashed up from government stimulus and fewer spending options during the Covid-19 lockdown. That’s been reinforced by the central bank slashing its key interest rate to 0.10% and initiating bond-buying programs that have helped lower borrowing costs across the economy.
Authorities’ success in suppressing Covid-19 -- outside occasional flare-ups -- has resulted in a rapid rebound in household and business sentiment, boosting activity and hiring. Unemployment has fallen from a pandemic peak of 7.5% to 6.4% in January as fiscal and monetary stimulus supported the economy through the worst of Covid-19, and is now fueling a recovery.
Australia’s household savings ratio stood at an elevated 18.9% at the end of September last year, having reached a record 22.1% in mid-2020.
Today’s data showed food retailing led the gains, as supermarkets recovered from a fall in December. There were declines in clothing, footwear and personal accessory retailing, household goods and department stores, which all saw impacts from interrupted trade in Queensland, the ABS said in a statement.
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