Retail spending flatlined in October in yet further evidence consumers have banked any recent stimulus windfall instead of hitting the shops.
Consumers spent a seasonally adjusted $27.57 billion in October, according to Australian Bureau of Statistics data released on Thursday, even after the Reserve Bank cut the interest rate to a record low 0.75 per cent at the start of that month.
Consensus predictions were for spending growth to pick to 0.3 per cent after an underwhelming 0.2 per cent rise in September.
Sales of clothing, footwear and personal accessory retailing fell 0.8 per cent, department stores dropped by the same amount, and the sale of household goods dropped by 0.2 per cent.
This was offset by a 0.4 per cent rise in cafes, restaurants and takeaway food services and a 0.1 per cent gain for food retailing.
The Australian dollar plunged from 68.52 US cents to as low as 68.34 US cents immediately after the release of the data.
Thursday’s figures follow September quarter GDP figures that showed what one economist called “chronic weakness” in household spending despite three rate cuts and federal government tax offsets.
The stagnant result was driven by sales declines in major economies of Victoria, down 0.4 per cent, and NSW, down 0.2 per cent; while retail in SA fell 0.5 per cent for the month.
Sales in Queensland rose 0.4 per cent, Tasmania 1.4 per cent, the NT 2.3 per cent, WA 0.2 per cent, and the ACT 0.3 per cent in seasonally adjusted terms.