Daily Commentary BY THE CURVE TEAM –

Retail Sales Set to Fluctuate

12th of January, 2021

Another bumper month for retail sales foreshadows a shift in outlook.

As indicated by the preliminary numbers and estimates, retail sales surged in November. They were up 7.1% for the month as Victoria re-opened and black Friday sales were popular.

Victoria was up 22.5% for the month and the rest of the country were up 2.6%. It leaves sales 13.3% higher for the year.

Given the Victorian re-opening drove much of the gains in November, the opposite scenario is set to drag on December and January sales. The end of December saw the northern beaches in Sydney go into lockdown and borders close to Sydney.

In January Brisbane has undergone a three-day lockdown, cases have re-emerged in Victoria and NSW is still recording low case numbers. Retail sales are still well above pre-Covid levels though, so despite the expected hit to sales they will likely remain well above pre-Covid levels.

Overseas, US politics continues to cause much uncertainty. The Democrats are attempting to impeach Donald Trump and unrest remains following protestor’s storming of the Capitol.

The sooner these issues are resolved the more certainty and clarity will be available for business and government policy.

Josh Stewart

Associate - Money Markets