© Reuters.
By Ambar Warrick
Investing.com– Australia’s retail sales fell in December, data showed on Tuesday, as spending was strained by the rising cost of living and most holiday shopping appeared to be happened last month.
fell 3.9% in December from the previous month, data from the Australian Bureau of Statistics (ABS) showed. The data broke 11 straight months of gains and fared worse than expectations for a 0.3% drop.
Rising inflation appeared to be the biggest driver of the downturn, as the Aussie grew more than expected in the fourth quarter to its highest level in more than 30 years. This inflationary trend is also likely to prompt the Reserve Bank to raise interest rates more, which in turn is expected to contribute to further cost-of-living pressures.
The sharp drop in retail sales also followed better-than-expected results in November, when Australians used an increasing number of Black Friday discounts to shop in advance largely for their holiday. The ABS noted in a release that businesses with the highest retail sales in November recorded the largest drop in sales so far in December.
“Retail businesses report that many consumers have coped with (cost of living) pressure by shopping more around Christmas in November to take advantage of strong promotions and discounts. as part of the Black Friday sale,” said Ben Dorber, head of retail at ABS. statistics.
Revenue from department stores and clothing retailers marked the biggest drop for the month, while food retail – the main driver of retail sales in 2022 – was the only industry to record an increase in the year. December.
Separately, and also down in December from the previous month, shows that consumers are increasingly skeptical about borrowing due to high interest rates.
Australian consumers are facing increased pressure from high inflation, sluggish wage growth and rising interest rates. This number has recently fallen to a 2020 low, with the country growing increasingly pessimistic about the economic outlook.
Rising inflation and interest rates are also expected to hamper economic growth in the fourth quarter and likely early 2023, with the RBA set in the near-term.
0.2% drop after reading retail sales.
