Westpac with their first quick take on the data earlier
WPAC noting the strong results, as we did earlier too:
- The detail was mostly positive
- Strong rises across most non-food categories - including a notable 2.2% bounce in household goods retail
- Overall the gain puts retail sales on track for a much improved Q2 after weather events contributed to a very soft Q1 (sales volumes up just 0.1%qtr). While it remains to be seen just how much food price rises have contributed to recent nominal sales gains, the picture from non food retail is promising.
Not a lot of currency movement on the session, update:
And more, this time via CBA:
- Comprehensively strong report
- We think it's a little premature to say that the retail trade sector is on a solid recovery path given wages growth is still very soft. Notwithstanding, the last two retail trade prints have been particularly encouraging and suggest that consumer spending should post a healthy lift in Q2.
- The surprisingly strong 0.7% (0.6502% if we're pedantic) increase in retail trade over May
- Annual growth stepped up to 3.8%, which is its fastest pace since April 2016
- The detail reveals that there were solid gains in the discretionary components
- The most recent employment and retail trade reports point to a lift in economic momentum over Q2. We are a little surprised by the strength in both of these reports given consumer sentiment is soft, business investment is weak and household income growth is constrained by very low wages growth. That said, the global economic backdrop has been improving and some of the 'soft' data like yesterday's CBA/Markit PMIs and the NAB business survey are consistent with a lift in economic activity.