A surprising dip in retail spending during April has stoked concerns that Australians consumers are feeling the pinch of wage stagnation.
Seasonally adjusted retail spending dropped by 0.1 per cent to $27.33 billion after a rise of 0.3 per cent the previous month and a 0.8 per cent lift in February, according to seasonally adjusted Australian Bureau of Statistics data released on Tuesday.
The result missed the consensus forecast of a 0.2 per cent rise and the Australian dollar dipped slightly to 69.64 US cents ahead of the Reserve Bank’s monthly board meeting on interest rates.
NAB economist Kaixin Owyong said the spending dip was a concerning development for an already stagnant economy.
“Following three quarters of consecutive weakness in retail volumes, these data are a worrying sign that the consumer remains in poor shape,” Ms Owyong said.
Spending on household goods fell by 0.9 per cent; cafes, restaurant and takeaway food services fell 0.7 per cent; and clothing, footwear and personal accessory retailing dropped by 1.2 per cent for the month.
This was offset slightly by a 0.8 per cent lift in other retailing, a 0.2 per cent rise in food retail, and a 1.8 per cent lift in department store spending.
The Australian Council of Trade Unions said consumer spending had been dulled by poor wage growth.
“It shouldn’t be surprising to anyone that we are seeing low consumer spending and retail sales when we are still near record low wage growth,” ACTU assistant secretary Liam O’Brien said.
This sentiment was echoed by BIS Oxford economist Sarah Hunter, who added that a housing market downturn continued to take its toll, while competition from online sales had squeezed bricks-and-mortar-retailers.
“Although conditions are improving in the mining sector the housing market continues to trend down, which is putting a drag on households’ wealth and spending patterns at the margin,” Ms Hunter said.
Retail spending in April fell by 0.4 per cent in both NSW and Victoria, by 0.5 per cent in the Northern Territory, and by 0.2 per cent in the ACT.
There were rises in Queensland (0.7 per cent), South Australia (0.6 per cent), Western Australia (0.1 per cent) and Tasmania (0.3 per cent).