The surprise fall in September’s retail sales took some in the market by surprise and seems to have taken some of the steam out of the ‘rate rise for Christmas’ clamour that was around yesterday.
The Aussie dollar dropped half a cent, falling back under 90 US cents when the figures were issued as traders saw the fall as lessening the need for a rate rise in December.
The dollar then recovered the 90 cent level in afternoon trading and overnight ahead of the Fed’s decision..
The ABS said Australian retail trade at current prices fell 0.2% in September to a seasonally adjusted $19.719 billion from $19.753 billion in August.
That was after a rise of 0.7% in August (which was revised down from the first reported 0.9% increase).
Over the September quarter, retail turnover fell by 0.4 % to $56.959 billion in seasonally adjusted volume terms.
That was after the 1.9% rise in the June quarter.
But the ABS did point out that in volume terms, retail sales turnover rose 1.4% in the September quarter, which tells us that we have now had four consecutive quarters of rising retail sales volume growth, which again emphasises the slightness of our slowdown, compared to the US and Europe where retail spending remains at or below the levels of a year ago.
"The ABS said that "sales fell, in seasonally adjusted terms, for Department Stores (-2.9%), Clothing, Footwear & Other Personal Accessory Retailing (-0.8%) and Household Goods Retailing (-0.7%).
"However, Australian’s are still enjoying eating out with sales rising in September for Cafes, Restaurants & Takeaway Food Services (1.0%).
"The Northern Territory (-0.7%) recorded the largest drop in sales, followed by Queensland (-0.6%), South Australia (-0.6%) and Western Australia (-0.6%), the ACT (-0.5%) and NSW (-0.1%). Sales rose in Victoria (0.4%) in September and in Tasmania remained unchanged."
Building approvals were more of what we have seen in recent months: private housing up and a rise in non-private approvals.
The way approvals have gone, the non-private dwelling sector could see another downturn in October: it fluctuates according to finance and council approvals
The ABS said "The number of private sector house approvals rose for the eighth consecutive month, with a gain of 0.3% nationally. Both Western Australia (3.2%) and Victoria (2.4%) showed good growth in private sector house approvals, with Queensland (-5.4%) showing the largest fall.
"The seasonally adjusted estimate for total dwelling units approved rose 2.7% following a fall in the previous month.
“The seasonally adjusted estimate for private sector houses approved rose 0.3% and has risen for nine months. The seasonally adjusted estimate for private sector other dwellings approved rose 14.6% following a fall last month."
Compared with September a year ago, private dwelling approvals are up 18.6% (and help explain the strong home lending going on, thanks to the first home buyers scheme).
But private dwelling approvals were down 11.3% in the year to September, thanks to the slowdown in lending to investors and developers, which is only now starting to improve.
The seasonally adjusted estimate for the value of total building approved fell 22.4% in September, the ABS said.
"The seasonally adjusted estimate for the value of new residential building approved rose 0.8% while the value of alterations and additions approved fell 1.0%. The seasonally adjusted estimate for the value of non-residential building fell 37.1%," the ABS explained yesterday.
And the performance of services index was up in October to its highest level in 19 months.
The index rose 5.5 points to 54.8, Commonwealth Bank of Australia and the Australian Industry Group said yesterday.
The rise followed the Performance of Manufacturing Index for October which showed a slowing in the rate of expansion in the sector.
Activity was still positive for the a third consecutive month in October, but the rate of growth fell 0.3 to 51.7 from 52 in October, indicating a slower pace of expansion.
Falling employment and soft exports put pressure on the sector, according to the PMI from the Australian Industry Group/PricewaterhouseCoopers.
(As with these surveys, any reading above the 50 point level separates expansion from contraction.)
