The retail trade data for January are they key data next week. They will reveal a fulsome update on the sales period around Christmas/New Year. Recall that in December, retail sales recorded a shock 0.1 per cent decline which continued the broad trends of weaker retail sales growth.
The market is forecasting a modest rebound in spending in January – a rise of 0.5 per cent which would be just enough to keep the annual growth rate at around 3.5 per cent which remains well down on the longer rate trend. It is likely to be yet another indicator confirming moderate growth – neither bad nor good. Retail spending is around one-quarter of GDP and if annual growth GDP is to be maintained, retail spending growth needs to accelerate from current levels.
Source: RBA
