(Bloomberg) -- Australian consumer spending fell in September, the first back-to-back monthly decline this year, as demand eased in industries like food and household goods that have remained buoyant during Covid restrictions.
Preliminary retail sales slid 1.5% from the previous month, the Australian Bureau of Statistics said Wednesday in Sydney. All states and territories, bar the Northern Territory, fell in September. Victoria state recorded a small monthly decline, following a large drop in August, the bureau said.
“Food retailing, household goods retailing, and other retailing, which includes online only retailers, recorded falls this month,” said Ben James, director of Quarterly Economy Wide Surveys at the ABS. “These industries have recorded elevated levels of turnover during the Covid-19 pandemic.”
The data span a period when Victoria remained under hard lockdown to combat a renewed outbreak of coronavirus -- and it remains the only state or territory to be trading below September 2019 levels. While Australian households’ consumption has been constrained by virus-related restrictions, their incomes have risen due to huge government stimulus and central bank easing.
That’s left the savings ratio at the highest level since the 1970s.
Sales of clothing, footwear and personal accessories all fell last month, according to the ABS. This was partly offset by rises in department stores, and cafes, restaurants and takeaway food services, which recorded gains after significant falls in August, the bureau said.
Slump Down Under
While Australia tipped into its first recession in almost three decades due to the coronavirus requiring large tracts of the economy to be shuttered, the hit has been less than in many developed-world peers. Yet, unemployment is tipped to rise further as Victoria reopens and government support programs wind down.
Retail sales have been volatile through the Covid period, posting a record decline in April when national lockdown peaked, before rebounding by a record in May as restrictions were eased. Sales have also benefited from panic buying at supermarkets and households spending on goods for their home.
Australia is now entering the Southern (NYSE:SO) Hemisphere summer, which may provide some respite from the virus. This contrasts with weather conditions in Europe and the U.S., with the former already experiencing a sharp increase in cases.
Consumer confidence Down Under surged further this month, with optimists now outweighing pessimists, following an expansionary budget and greater containment of the virus. The Reserve Bank of Australia is expected to ease policy further next month, with the key interest rate currently at 0.25% and a yield target on the three-year government bond at the same level.
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