The sharp fall in retail trade is more evidence the Reserve Bank should hold off raising interest rates further
The answer is a bit nerdy-economics, but worth understanding because retail trade makes up about 20% of GDP .The first thing is that the 3.9% fall is “seasonally adjusted”. This involves adjusting the data because every year certain things affect our spending – especially Christmas.
But all that figure tells us is that because of Christmas and Boxing Day we spent more in December than November. It’s a bit like saying more people work on Mondays than Sundays and therefore employment went up. Take a look at the spending on “other retail” and dining out. Prior to the pandemic, we roughly spent an equal amount on both categories. Then the shutdowns occurred:
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