The latest electronic card transactions for the September quarter show that seasonally adjusted retail sales grew at 0.9 percent. This is in line with our June forecast, for annual growth of 3.5-4.0 percent. It was a bit ahead of what might be implied from the Treasury’s Monthly Economic Indicators forecast in August. The MEI had consumption growth of around 0.5 percent per quarter over the rest of 2012, while retail typically tends to grow more slowly than consumption.
The month of September, even after adjusting for seasonally spikes and troughs, was more challenging. Total retail spending fell by 0.6 percent in September (seasonally adjusted). This included an $11 million fall (-0.7 percent) in sales of consumable goods. Spending also fell in other core industries: durables (-$4.9 million, -0.5 percent), hospitality (-$4.8 million, -0.8 percent), and apparel (-$2.4 million, -0.8 percent). There was modest growth in seasonally adjusted sales for the services (0.7 percent), motor vehicles (0.1 percent), and fuel industries (0.4 percent).
While the latest monthly statistics may suggest a downturn, we should note that there have been several months of positive growth. So it might be better regarded as consumers continuing their circumspect spending behaviour, rather than the start of a downward trend.