Growth, inflation and labour market all easing
Our forecast points to a negative (-0.1% m/m) print for December, in line with our view that the strong November ABS print largely represented Christmas spending brought forward by expanded Black Friday sales.
This month we continue our podcast series to accompany the NAB Cashless Retail Sales Index. In this short podcast, you’ll get a quick summary of the major drivers of the index this month. Listen now.
Our forecast points to a negative (-0.1% m/m) print for December, in line with our view that the strong November ABS print largely represented Christmas spending brought forward by expanded Black Friday sales, creating a new seasonal pattern that is yet to be fully captured by the ABS seasonal adjustment process. But the retail sector has more fundamental issues: unemployment set to edge higher, sluggish wage growth and elevated consumer debt continue to dampen consumer sentiment, despite interest rate cuts and higher house and share prices.
In parallel to our standard mapping equations, we are running an experimental methodology. This alternative methodology forecast a bigger rise in November and an even weaker result in December. If anything, our December forecast has downside risk.
The current bushfire season – underway since September – is a national tragedy. The local economic impact in bushfire-affected areas has been extreme. While it is unlikely that the fires were a major influence on the national December retail data, there may be much more substantial second round impacts in January and February.
For more information, please see the NAB Cashless Retail Sales Index December 19
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