Interest rate rises may be finally catching up with Australian consumers, with retail trade contracting for the first time all year.
Retail trade turnover fell 0.2 per cent for the month, breaking a nine-month streak of month-to-month increases.
Australian Bureau of Statistics head of retail Ben Dorber said the fall suggested cost-of-living pressures, including lifting interest rates, were starting to weigh on consumer spending.
“Turnover fell in all industries in October except for food retailing, which rose 0.4 per cent boosted by flood-related spending in parts of Australia and continued high food prices,” he said.
Department store trade fell the furthest – down 2.4 per cent for the month.
Another increase in retail sales was broadly anticipated, with ANZ economists suggesting the surprise lift could encourage the Reserve Bank to hold interest rates in December.
“We think the recent strong wages and employment reports will be more important for the RBA’s December decision, however,” economists Madeline Dunk and David Plank said.
The economists said it may be too early to call a turning point for consumer spending habits, with Black Friday sales potentially deflecting some of October’s spending to November.
“The data at hand to early last week suggest spending in November is holding up,” they said.
Petrol prices have also eased, with the national average unleaded petrol price falling 6.6 cents to $1.87 a litre.
The Australian Institute of Petroleum report saw pump prices fall to $1.85 across the major cities, an 8.6 cent fall.
Oil prices also fell for a third straight week last week, losing two per cent to hit $US83.63 a barrel.
CommSec economist Craig James said three factors were weighing on oil prices, including an upcoming oil producer meeting to decide production quotas in early December.
Ongoing discussions between G7 and European Union diplomats about a cap on Russian oil prices were also having a cooling effect on the market, as well as concerns that rising COVID-19 cases in China could diminish demand for energy.
Poppy Johnston
(Australian Associated Press)
