- Matthew Hassan, Westpac senior economist
Australians opened their wallets more willingly a month prior to Christmas. Retail sales increased 0.4% in November from a month earlier, when the gauge rose an upwardly revised 0.6%, the Australian Bureau of Statistics reported. Household goods retailing climbed 0.9% in November, while dining out food services increased 1%, and food retailing rose 0.2%. Clothing, footwear and personal accessory retailing was up 0.8% and other retailing gained 0.4%. From a year earlier, sales rose by 4.34%, an acceleration on the 3.93% pace seen in October. People's perceptions of their family finances compared with 12 months ago were at the highest level in seven years, according to weekly ANZ-Roy Morgan consumer confidence data.
The Reserve Bank of Australia has tried to boost consumption by making monetary conditions easier on households. Last year, the central bank slashed the cash rate to a record-low 2.0%, and in December signalled that further easing could be on the table if demand needed more support. Weak inflation could prompt the RBA to cut interest rates again this year, with the CPI climbing only 1.5% year-on-year in the third quarter, below the bank's 2-3% target range. Market participants see less than a 20% chance of a cash rate cut to 1.75% at the RBA's February 2 meeting.
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