Retail recession
Pouring cold water on the notion that the economy needs to be cooled further, retail turnover was incredibly weak in the month of March, falling -0.4 per cent in seasonally adjusted terms.
Allowing for issues with seasonality, the year-on-year growth was the slowest in 20 years, despite record high population growth.
The graph shows a fascinating story of lockdowns, reopenings, and spikes in consumer prices!
Source: ABS
Retail figures basically don't get much weaker than that.
Retail turnover is 30 per cent higher than it was 5 years earlier, but the population of Australia has increased by 1.9 million (+7½ per cent) over that time, and of course retail prices took quite a sizeable leap through the pandemic as well.
I'll let others kick over the entrails there, and instead take a run through the Reserve Bank's credit growth figures from last month's Financial Aggregates, which slowed a little to 0.3 per cent in March (from 0.5 per cent in February).
Housing credit growth actually picked up a bit over the month from 0.37 per cent to 0.40 per cent.
The uptick was driven by both owner-occupiers, and this month, investors.
Over the year, housing credit growth picked up a little to 4.3 per cent.
The past year has been characterised by stock shortages, pushing housing price growth far ahead of what might've been expected or implied by the credit impulse.
We thus may well find that the peak for the rate of housing price growth was in the first quarter of 2024, as higher mortgage rates now begin to bite.
Overall, solid credit growth figures for housing, but incredibly soft retail spending, which will rightly be today's main economic story.
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