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Australian retail sales up slightly in February thanks to Taylor Swift concerts – 03/28/2024

Australian retail sales up slightly in February thanks to Taylor Swift concerts – 03/28/2024

Australian retail sales rose slightly in February as Taylor Swift concerts boosted spending on clothing and F&B, although annual sales growth remained weak as higher interest rates dampened income.

Australian Bureau of Statistics (ABS) data on Thursday showed retail sales rose 0.3% in February, compared with January, when they grew 1.1%. Analysts expect an increase of 0.4%. In recent months, the series has experienced significant fluctuations as changes in consumption habits have disrupted seasonal adjustments.

Sales of 35.9 billion Australian dollars ($23.43 billion) rose just 1.6 percent from the previous year, a paltry result given the country's rapid population growth.

Taylor Swift's seven sold-out concerts in Sydney and Melbourne led to increased spending on clothing, goods, accessories and dining, ABS head of retail statistics Ben Dorber said.

“Excluding the temporary impact of the Taylor Swift concerts, underlying retail revenue growth was up just 0.1% on trend. After high volatility from November to January, core spending stagnated.

Pressure on consumers was a key reason why the Reserve Bank of Australia left interest rates unchanged at 4.35% this month for a third consecutive meeting.

However, Gov. Michael Bullock did not rule anything out on the policy, saying the risks were “well balanced.” Markets believe the next move in interest rates will come down, but no rate relief will happen until August or September.

The February retail sales report showed food retail sales fell 0.1% in the month and household goods retail sales fell 0.8%.

“Consumer spending is in a very weak period, with high interest and inflation rates putting pressure on household finances,” said Sean Longeck, head of macroeconomic forecasting at Oxford Economics Australia.

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“The outlook for the rest of the year will improve as inflation eases and real wage growth improves. But sales momentum will be uneven, especially in the first half of the year.”

($1 = 1.5321 Australian dollars)