(RTTNews) - Australia’s monthly retail sales fall in September was disappointing given the promising gain in August, Matthew Hassan of Westpac Bank said Monday. The analyst is of the view that soft performance of the month points to a slower underlying pace post stimulus.

“With the drag from the ‘let down’ in fiscal boosters likely to have dropped out in July, the August bounce suggested spending growth was resuming at a robust underlying pace”, Hassan said. The September sales dip and revised August figure pares that assessment back quite significantly, he pointed out.

The firm noted that retail sales fell 0.2% month-on-month in September, after a revised 0.7% rise in August. Year-on-year, the retail sales were up 6% in September, but fell 0.4% in the third quarter.

Hassan said a rise in retail sales in caf� and restaurants and other retail items in September, indicated that there were further signs of freeing up in discretionary spending. At the same time, retail sales of clothing, household goods and department store sales fell, while food sales were flat. Moreover, the pattern was similar for the third quarter as a whole, but with better performance from retail also, the economist noted.

Hassan said the retail components of consumption could detract 0.1 percentage points from GDP in the third quarter. “Moreover, the data suggests that consumer spending post-fiscal stimulus is resuming at a more measured pace than had been indicated by the August retail bounce and upbeat consumer sentiment reads”, the economist noted. That said, if sentiment is sustained at current levels, an acceleration in demand remains likely, he added.

Meanwhile, Hassan pointed out that the trend retail sales data should be treated with caution, as they were subject to revisions, and were more slow to pick up on shifts. On a trend basis, retail sales were up 5% on an annual basis in September.

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Posted in Categories: Australia, Economy, Releases.

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