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Australia retail sales cheered by Taylor Swift in February

Published 03/28/2024, 08:46 AM
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Investing.com-- Australian retail sales grew in February, supported chiefly by increased consumer spending on concerts by pop star Taylor Swift through the month, although sticky inflation and high interest rates still kept overall spending muted. 

Retail sales grew 0.3% month-on-month in February, data from the Australian Bureau of Statistics showed on Thursday. The reading was slightly below expectations of 0.4%, and also slowed from the 1.1% bounce seen in January.

Growth in spending came chiefly from seven sold-out Swift concerns in Sydney and Melbourne, which saw increased spending on merchandise, apparel, and dining out, the ABS said in a note. 

But beyond the boost from Swift, spending remained sluggish amid persistent pressure from relatively high inflation and the prospect of higher for longer interest rates. 

“Looking past the temporary and one-off impact of the Taylor Swift concerts, underlying growth in retail turnover was up only 0.1 per cent in trend terms. After a period of higher volatility from November through to January, underlying spending has stagnated,” said Ben Dorber, ABS head of retail statistics. 

High Australian inflation weighed heavily on household finances over the past two years- pressure which was exacerbated by a 425 basis point increase in interest rates. 

While inflation did fall from 30-year highs through 2023, it still remained well above the Reserve Bank of Australia’s 2% to 3% target range.

This trend is expected to see the RBA keep interest rates higher for longer, at least in the near-term. But the RBA is also targeting some cooling in retail spending, given that it is among the biggest drivers of inflation. 

But while retail sales growth has stagnated in recent months, it has still remained somewhat steady, largely thanks to Australia's robust jobs market. Strong employment numbers have factored into some strength in household finances.

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