Swift blip hides weak consumer that bodes well for RBA

Australian consumers continue to funnel their cash into one-off events such as Taylor Swift concerts while scrimping elsewhere.

Retail sales were up a lacklustre 0.3 per cent in February, with the Eras tour boosting spending on clothing, merchandise, accessories and dining out while sales contracted across other categories.

The result was below the consensus forecast of a 0.4 per cent lift and underlying growth was up only 0.1 per cent in trend terms.

AMP economists Diana Mousina and My Bui said the data signalled softness in the retail sector that has continued into 2024.

Shoppers are seen in Sydney
Retail sales were up a lacklustre 0.3 per cent in February.

"While one-off events like sport or concerts can cause a temporary rise in retail spending, it isn’t strong enough to offset the broader pressures on the consumer of high interest rates, elevated - albeit slowing - inflation and the increasing tax burden from bracket creep," they wrote in a note.

Together with below-expectations inflation data for February, AMP believes the economic backdrop is consistent with the RBA shifting to a more neutral stance on future interest rate movements and starting cuts mid-year.

Clothing, footwear and personal accessory retailing lifted 4.2 per cent and department stores grew 2.3 per cent in February, with cafes, restaurants and takeaway food services up a more modest 0.5 per cent based on the bureau's release.

But household goods fell 0.8 per cent, "other" retailing was down 0.4 per cent and food sales sunk 0.1 per cent.

In another sign of an economy losing steam in response to higher interest rates and above-target inflation, job vacancies recorded a more convincing fall in the three months to February.

After a modest 0.8 per cent decline in the three months to November, the bureau recorded a 6.1 per cent fall through to February.

National Australia Bank economist Taylor Nugent said the job vacancy data lined up with other indicators that showed labour demand gradually coming off its peak in mid-2022.

Diners at a cafe in Melbourne
Cafes, restaurants and takeaway food services were up 0.5 per cent in February.

And while open roles were down 24 per cent from those highs, they were still sitting 60 per cent above pre-pandemic levels and there was still 1.5 unemployed people for every vacant job. 

The vacancy data follows a strong set of labour force data last week that showed the jobless rate sinking back to 3.7 per cent from 4.1 per cent, although much of the heat in the release was attributed to changing seasonal patterns. 

"While the labour market remains tight and labour demand remains at reasonably strong levels, they have moderated from earlier peaks," Mr Nugent concluded.

Despite evidence of a cooling economy, the nation's household wealth rose for the fifth quarter in a row in December, lifting another 2.8 per cent to a total of $15.7 trillion.

The ABS attributed much of the boost to residential land and dwelling as house prices rose steadily, as well as improvements in domestic and overseas share markets. 

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store