Investing.com– Australian retail sales missed expectations in April, remaining flat from the prior month as a rising cost of living and high interest rates saw consumers pulling back further on spending big.
were flat in April from the prior month, data from the Australian Bureau of Statistics (ABS) showed on Friday. The reading missed expectations for a rise of 0.3%, and showed that growth was slowing after a 0.4% rise in March.
Most retail sectors saw a drop in sales, with only department stores and clothing seeing gains as consumers spent chiefly on warm clothing ahead of the winter season.
Spending on food also remained relatively high amid steep food price inflation, but dropped in April from the prior month.
Overall retail spending suffered as remained pinned near 30-year highs, and as continued interest rate hikes by the pushed up mortgage costs.
“Retail turnover has plateaued over the last six months as consumers spent less on discretionary goods in response to cost-of-living pressures and rising interest rates,” Ben Dorber, ABS head of retail statistics, said in a statement.
Dorber noted that the return of cultural events after the COVID-19 pandemic was also helping keep retail spending somewhat buoyed.
Friday’s reading came as a private survey showed earlier this month that Australian consumer sentiment was at its worst level since the COVID-19 pandemic and the 2008 financial crisis.
A sharp rise in interest rates over the past year has largely weighed on the economy, with the RBA now forecasting weak economic growth in the coming months.
While a robust labor market has still helped support some spending and sentiment, the RBA also expects this to change as economic growth cools.
Australia’s unexpectedly contracted in April, while rose from near 50-year lows. Wage price growth has also largely stalled in the country.
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