SYDNEY (Reuters) – Australian retail sales had the biggest increase in 10 months in November as Black Friday discounting drew cost-conscious shoppers, but even so they missed forecasts suggesting consumer demand remains subdued.
Analysts also suspect the extra demand was just brought forward from Christmas.
The data is unlikely to be seen as an impediment for rate cuts, with markets wagering that the Reserve Bank of Australia could ease policy in February.
Data out from the Australian Bureau of Statistics (ABS) on Thursday showed retail sales rose 0.8% in November from October, when they increased by a revised 0.5%. Analysts had looked for a gain of 1.0% in November.
The Australian dollar slipped 0.3% to $0.6199 on the data.
Sales were up 3.0% compared to a year ago at A$37.1 billion ($23 billion), with the ABS noting promotional activity now stretched across the entire month of November, not just the Black Friday weekend.
Sales at department stores jumped 1.8% in the month, while spending at cafes and restaurants rose 1.5%.
“The continued rise in popularity of Black Friday sales in Australia has meant the seasonal strength has been unable to be captured effectively by the ABS’s seasonal adjustment,” said Ben Udy, lead economist for Oxford Economics Australia.
“This makes it extremely difficult to get a read on the underlying strength of consumption from these data, as the solid rise is likely to be offset by a contraction in sales in December.”
Last year, sales in December tumbled as consumers mostly brought forward their spending to take advantage of Black Friday sales.
The outlook for sales has been helped somewhat by a slowdown in inflation and large cuts to income taxes. The thus-far pick-up in consumer spending has been disappointing, however, and was a reason that the central bank unexpectedly turned dovish last month.
The RBA has kept interest rates steady for over a year now, judging that the cash rate of 4.35%, up from a record-low 0.1% during the pandemic, is restrictive enough to bring inflation to its target band while preserving employment gains.
A drop in core inflation on Wednesday led markets to ramp up bets for a rate cut in February. Swaps imply a 60% chance for such a move, while futures indicate a 78% probability.