Retail spending grew by just 0.1 per cent in August, worrying retailers as the festive season fast approaches.
Joe Hockey often tells journalists not to believe everything they read when he tries to dodge answering a question.
It would seem the treasurer forgot his own wisdom in his haste to talk up the latest consumer spending figures – data that otherwise left retailers and financial markets far from impressed.
Mr Hockey used parliament’s question time on Wednesday to quote from an analysis by Commonwealth Securities that the 0.1 per cent rise in retail spending in August meant that over the past 12 months spending had grown 7.4 per cent.
That was said to be “the best rolling 12-month period since January 2002”.
“We welcome good news and the continuation of the good news,” Mr Hockey said.
The spending was the result of business creating jobs six times faster under the coalition than under Labor.
But Commonwealth Securities later corrected the report, saying the 7.4 per cent increase was actually just for NSW.
However, spending was still 5.1 per cent higher than a year earlier Australia-wide.
Yet the 0.1 per cent monthly increase was smaller than economists had expected and retailers are concerned by such limp spending with the festive season fast approaching.
“Interest rates must remain low in order to support business,” Australian Retailers Association executive director Russell Zimmerman said.
The Australian National Retailers Association blamed falling confidence and, contradicting Mr Hockey, a soft labour market for the slow spending.
The Australian dollar also slipped to test its 86.60-cent 2014 low on the data.
Other data showed the decline in the currency over the past month from around 95 US cents has yet to help manufacturers.
The Australian Industry Group’s latest performance of manufacturing index showed activity was still in contraction in September.
While businesses welcomed the significant correction in the value of the Australian dollar in September, it would take some time before competitiveness improves in domestic and export markets, the group’s boss Innes Willox said.
Even the hotspot of the economy – property prices – have come off the boil, slipping below the annual 10 per cent pace in September.
Reserve Bank officials will face a Senate inquiry on Thursday to discuss the central bank’s recent thoughts on trying to curb the exuberance of property investors.