Interest rates are on hold but what are the other key indicators for the year ahead? We break it down.
Our data show a drop in retail sales in May, albeit from generally strong levels seen earlier in the year.
Our data show a drop in retail sales in May, albeit from generally strong levels seen earlier in the year. Inflationary concerns continue to escalate, both at home and abroad, with food and petrol key drivers. The RBA’s 50 basis point hike last week increases the chances of further rate rises (we expect further 50bp hikes in July and August), with a materially lower outlook for the consumer as a result.
That said, the NAB Monthly Business Survey continues to report generally strong business conditions, albeit notably weaker confidence for the retail sector. The May survey recorded easing cost growth, albeit from record highs in April. However, retail prices were back up to 3.1% at a quarterly rate.
Our weekly consumer tracking data, released fortnightly, provides a timely, high frequency indicator on the state of the retail and hospitality sectors. This data has showed signs of slowing (from high levels) over recent weeks. There are also indications that consumers are substituting their spending towards essentials like food and fuel at the expense of discretionary spending.
For more information, please see the NAB Cashless Retail Sales Index (May 2022)
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