australia retail figures may hold back rate rises
News Posted On: 10 November 2009
The central Reserve Bank of Australia raised its base rate to 3.5% on Tuesday in response to a strengthening economy. The markets had expected a full half per cent rise, but the RBA held the rise to a quarter of one percent after retail sales fell unexpectedly in September.
Retail figures showed sales for September fell 0.2%, against an expectation of a 0.4 percent rise.
"The sales figures are certainly an indication of policy fade coming through," said Michael Blythe, the chief economist at the Commonwealth Bank. "These numbers won't stop future rate rises but the odds on a move in December are starting to lengthen."
Sales for the third quarter were also down by 0.4 percent in inflation-adjusted terms, the first such reversal in a year, probably reflecting the relaxation of stimulus measures taken during the credit crisis.
Billions had been injected into the economy at the turn of the year and vehicle grants for businesses also helped bring purchases into the first half of the year. The next set of GDP data will be released on December 2nd and any sign of weakness will put further pressure on the central bank to ameliorate or even postpone further rises.
However Su-Lin Ong, a senior economist at RBC noted that the slow down was not unexpected by the RBA once fiscal measures to stimulate the economy were withdrawn.
Indeed the RBA has indicated that it thinks consumer demand is likely to hold up going forward, a view apparently reinforced by data released yesterday by the Australian Industry Group.
The new AIG Commonwealth Bank performance of services index climbed 5.5 points to 54.8 showing activity had expanded for the first time in 19 months in October indicating significant recovery in the retail sector, which represents 23 percent of Australia's GDP. The retail industry accounts for 15 percent of all jobs, the most of any sector.
The housing sector also got a boost with building approvals up 2.7 percent in September, a rise of 11.7 over the same month in 2008.
View property for sale in Australia
View overseas property for sale
Back to news articles for this country
Latest Related News Articles in Australia
Chinese Buyers Finding Australian Property Very Attractive
2012-02-01
More and more Chinese nationals are investing in the Australian property market. Last year foreign d.....
Australian Property Prices Drop for Second Consecutive Quarter
2011-10-14
Property prices in Australia have fallen for the second consecutive quarter, and this decline is exp.....
Property Auction Clearance Rates Increase in Australia
2011-09-27
Property auction clearance rates in Australia have increased to the highest level for more than thre.....
Melbourne Shines Amid Stabilising Australian Property Market
2011-08-01
According to the latest release of data in the Australian Property Monitors Report, houses prices ac.....
Australian Property Prices Falling as Borrowing Costs Rise
2011-05-03
Australian property prices are falling hard; in the first quarter of 2011 prices dropped by the most.....
Melbourne Commercial Property is Performing Strongly
2011-04-14
Figures released by real estate consultants DTZ show that commercial property in Melbourne is the mo.....
New Figures Show Growth in Australian Property
2011-02-14
New Figures from the offical Australian Bureau of Statistics show strong growth in property prices.....
Attempts to cool Australian property market
2011-02-10
Attempts are being made once again to cool the Australian property market which was rated over value.....
Australian Property Market Takes on Steady Growth
2011-02-01
The RP Data-Rismark Hedonic home value index increased in the December quarter by 0.4 percent and 4......
Australia Property Market Looks Like Good Investment
2011-01-08
Recent data on the Australian property market may make it attractive to investors.....