The Australian Bureau of Statistics has just released retail sales figures for the month of May. Contrary to market expectations, sales remained strong. But is this as good as it gets before rising living expenses eat into discretionary spending? Or will the build-up in pandemic-related household savings, and our strong labour market, continue to drive growth in consumer spending?
The RBAs July monetary policy decision will be made on Tuesday, with markets pricing in a 50 basis point rise, according the ASX RBA Rate Tracker. The RBA Rate Indicator run by the ASX aims to demonstrate market expectations of the change in the cash rate.
This week, RBA Governor Philip Lowe spoke about the department’s monetary policy intervention to tackle inflation in the evolving economic environment. Over the last six months, similar factors have continued to put pressure on food and energy prices – namely the war in Ukraine, foods on the East coast, and Covid lockdowns in China.
This week the NAB released the May monthly business survey, reporting an easing in confidence but a strong outlook for conditions. Despite fears, forward indicators suggest that businesses still maintain a relatively positive outlook for the Australian economy.