Growth, inflation and labour market all easing
Our data mapping points to a moderate fall in June, following massive swings in March, April and May suggesting there has been some stabilisation in retail sales.
This month we continue our podcast series to accompany the NAB Cashless Retail Sales Index. It’s a short, 10 minute podcast, designed to give you a quick summary of the major drivers of the index this month. Listen now.
NAB Chief Economist, Alan Oster commented:
Our internal data are now showing a stabilisation of retail sales at a surprisingly buoyant level, particularly given the circumstances. While some parts of retail will remain under major pressure (for example businesses affected by Melbourne’s lockdown, particularly in food service) overall the sector has outperformed our expectations, particularly given the weakness in the Australian economy.
The June Monthly Business Survey has also picked up improved retail activity. Notably, retail business conditions have risen to be close to the top of the pack – a significant turnaround from persistently weak outcomes prior to the pandemic.
Whether this can be sustained remains to be seen. While the economy has been hit very hard by the virus, it has also bounced back much faster than we expected. That said, unemployment remains very elevated and retail spending has likely been underpinned partly by the substantial – and in our view very welcome – increase in government income support. We expect that this support will continue (in some form) beyond September.
For more information, please see the NAB Cashless Retail Sales Index June 2020.
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