Economists unconvinced by retail surge
Department store sales helped retail spending rebound sharply in February, but economists aren't getting carried away by the surprisingly strong rise.
Seasonally adjusted retail spending rose 0.6 per cent to $26.4 billion in the month, according to the Australian Bureau of Statistics.
The jump beat market expectations of a 0.3 per cent rise and followed two flat months of sales over the Christmas shopping season.
Department store sales were up 1.5 per cent, while clothing, footwear and personal accessory sales rose 1.1 per cent, as did those of household goods.
But department store giants Myer and David Jones have written down the value of their businesses by a combined $1.2 billion this year, and AMP chief economist Shane Oliver was among those urging watchers not to read too much into the positive data released on Wednesday.
"The strength in (clothing and department stores) may be just a bounce after months of weakness and increased discounting may have played a role," Mr Oliver said.
Myer last month slumped to a $476.2 million half-year loss after chief executive Richard Umbers departed due to his failure to arrest flagging sales, while DJ's South African owner wrote down the value of the stores by $713 million due to challenges facing the retail industry.
ANZ senior economist Jo Masters said that, as long as household balance sheets are under pressure, ANZ remains cautious about the outlook for retail.
"Anaemic wage growth, record high debt, slowing house price growth and most recently a stalling in consumer confidence all act to offset the strength in jobs growth," Ms Masters said.
Sales at cafes, restaurants, and takeaway food outlets rose 0.7 per cent.
RBC Capital Markets head of Australian and New Zealand FIC strategy Su Lin Ong said Wednesday's positive result was no reason for the central bank to change its cautious tone on the outlook for household consumption.
"We caution that it is just one month following a very weak period and we are loathe to read too much in to it," Ms Ong said.
Australian Institute of Company Directors chief economist Stephen Walters concurred, calling out weak wage growth, stock market volatility and "brittle" Australian consumer confidence.
"The retail sector probably is not out of the woods just yet," he said.
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