(Bloomberg) -- Australian household spending jumped in November as a combination of the easing of virus lockdowns and pre-Christmas purchases boosted outlays, suggesting the broader economy is likely to have rebounded solidly in the final three months of 2021.
Retail sales soared 7.3% in the month after advancing 4.9% in October, easily outpacing economists’ expectations of a 3.6% gain, Australian Bureau of Statistics data showed Tuesday. Sales soared a record 20% in Victoria, with the state’s lockdown having ended in late October, while New South Wales advanced 5.1% and the Australian Capital Territory jumped 19.2%, the report showed.
“Further easing of Covid-19 restrictions in the southeastern states and territories has seen the retail industry recover all lost momentum caused by the delta outbreak,” Ben James, director of Quarterly Economy Wide Statistics at the ABS, said in a statement.
Economists expect spending to remain strong in the run up to the Christmas holiday period with median forecast for a brisk expansion in the the final quarter of 2021 for the $1.5 trillion economy. However, the outlook for early 2022 looks rocky as a surge in new coronavirus cases from the omicron variant is prompting caution among shoppers.
The ABS also released trade data Tuesday showing another solid surplus in November of A$9.4 billion ($6.8 billion), though narrower than the A$10.6 billion predicted by economists as a 6% increase in imports exceeded a 2% gain in exports.
Today’s retail report showed:
- Clothing, footwear and personal accessory retailing soared 38.2% in November and department store spending jumped 26%
- The ABS said consumers “brought forward Christmas spending to take advantage of sales and minimize delivery and stock availability concerns ahead of the festive season”
- Food retailing was the only industry to fall in the month, down 2.5%
- Aside from the Northern Territory, all remaining jurisdictions recorded retail sales rises to record levels. Turnover in the Northern Territory fell 2.7% as lockdown restrictions hit sales, the ABS said
While the November increase in retail spending was the fourth largest in the series’ history, the Reserve Bank of Australia is likely to discount it somewhat given soaring coronavirus cases in Australia in recent weeks. The RBA holds its first meeting of 2022 on Feb. 1, when it’s due to decide on the future of its bond-buying program.
“For policy makers, this data would have been viewed favorably in the absence of the omicron spread,” said Callam Pickering, an economist at global jobs website Indeed Inc. “The economic environment though is moving too rapidly to put much weight on backwards looking measures of economic activity -- November feels like a lifetime ago.”
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