RETAIL sales rose strongly in January from December in the latest sign record-low interest-rates are boosting consumer sentiment and spending.
Retail sales climbed 1.2 per cent from December, the Australian Bureau of Statistics said today, compared with the 0.4 per cent rise expected by economists.
December sales growth was upwardly revised to 0.7 per cent from 0.5 per cent.
Australia’s trade balance, meanwhile, improved sharply in January in line with strong export growth.
New South Wales drove the lift in retail sales, contributing more than half of the 1.2 per cent increase, supported by strong spending in Victoria and Queensland.
JP Morgan economist Ben Jarman said the figures were impressive but were surprising given the relativity weak jobs market and soft consumer sentiment.
He said the figures may have received a boost from the timing of federal government payments, including the Schoolkids Bonus.
Mr Jarman said it was too early to say if the retail sector was finally emerging from a long period of weakness.
“Certainly the anecdotes we’ve heard from retailers have been that things were reasonable in January after a good boxing day to new year period,” he said.
“So we are a bit reluctant to say this is a return to the good old days of retail.”
The result will likely see Treasurer Joe Hockey again forced to reject suggestions that the Coalition government inherited from Labor an economy in better shape than he expected.
The Treasurer denied that Labor handed him an economy that was in better shape than expected in the wake of yesterday’s upbeat GDP figures.
The data showed the economy grew 2.8 per cent in 2013, after a rebound in the December quarter, helped by resurgent household spending and booming exports.
“When I came in I wasn’t surprised by what they left … it was a mess,” Mr Hockey said this morning, citing rising unemployment, deteriorating terms of trade and dismal consumer and business confidence.
“We’re turning the corner, but there’s much work to be done.”
Meanwhile, a third economic read, Australia’s trade balance for January, also came in ahead of expectations.
According to ABS, the nation’s trade surplus for the first month of the year was a seasonally adjusted $1.43 billion, well ahead of the $100m surplus, Bloomberg analysts were expecting.
Exports rose 4 per cent from December while imports climbed 1 per cent, the government data showed.
Commodity exports are growing strongly as the resource-rich economy reaps the benefit of a decadelong infrastructure boom that’s lifted mining and port capacity.
With Dow Jones Newswires