The Australian economy is in an odd place at the moment.
Building approvals are up, but not so strong for private housing; retail sales rose, but were weak as the interest rate rises bit and the trade account is improving, but not yet surging as better prices for coal, iron ore and other commodities have yet to appear in any meaningful way.
Inflation is higher than expected, car sales surged in April, and interest rates are looking to rise if the RBA sees more signs of cost pressures in the economy.
According to the Australian Bureau of Statistics March retail sales figures rose 0.3% (seasonally adjusted) to $19.92 billion, seasonally adjusted, following a revised 1.2% fall in February, seasonally adjusted,
Economists had expected a 0.7% increase for March.
Retail sales were up 0.1% for the March quarter, the ABS said.
That’s a bit better than expected after more than half a dozen leading retailers revealed poor sales updates.
Economists had also been looking for a bigger contribution for the quarter of around 0.3%.
The March quarter figure however is down sharply from the 1.0% contribution in the December quarter and confirms that retail activity was very subdued, as the likes of Harvey Norman, Woolworths, Coles, Fantastic Furniture and other chains have confirmed.
That points to a lower contribution to March GDP from consumption and consumer spending.
The ABS said retail sales rose across five retail industry groups: Clothing, Footwear & Other Personal Accessory Retailing (1.4%), Department Stores (1.1%), Other Retailing (0.9%), Cafes, Restaurants & Takeaway Food Services (0.7%) and Food Retailing (0.3%).
Sales fell in Household Goods Retailing (-1.0%).
Sales were up in the ACT, (1.3%), NSW, (1.2%), the Northern Territory (0.9%), South Australia (0.5%) and Western Australia (0.4%). Sales fell in Tasmania (-1.0%), Queensland (-0.5%) and Victoria (-0.1%).
The ABS said the trade deficit rose in March to $2,082 million, seasonally adjusted, an increase of $381m on the revised deficit in February 2010 (cut by $223 million).
That left a trade deficit for the March quarter, seasonally adjusted, of $4,734m, down $808m on the deficit of $5,542m for the three months to December 2009.
However, if the seasonal factors used in compiling quarterly Balance of Payments are applied, the March quarter 2010 deficit was $4,618m, a decrease of $989m on the revised December quarter 2009 deficit of $5,607m.
That looks like being a positive for growth.
There should be a sharp rise in export income from April, because of higher iron ore and coal prices.
