Retail sales figures have replaced other important data such as employment as the chief focus of central banks.
When they mention “fast indicators”, among them are retail sales figures.
We are waiting for the economy to return to normal, and the progress towards that can be seen as consumers return to buying.
Employment is generally a lagging indicator, and will likely stabilize months later. People will be able to return to work if retail sales recover.
Australia Being Dragged Down by Victoria
Australia, so far, has managed to keep its “second wave” of coronavirus cases limited to Melbourne. Only Victoria has needed a full lockdown.
New cases have started to trend down since the beginning of the month. In fact, new daily numbers at half the average recorded at the peak.
However, the state that is responsible for just under a quarter of the country’s GDP is likely to remain in lockdown for some time to come.
The Victoria lockdown is likely to have dragged on the country’s retail sales data. This is because it was imposed half-way through the data collection period.
Estimates are for July retail sales to come in at -2.7% compared to +2.7% prior. Investment firms are cautioning about the outlook for major retailers, expecting a further loss of sales during the current quarter.
The UK Returning Back to Normal
May and June retail sales showed significant growth, recovering from the drop in the prior months.
With stores being opened for three months now, analysts are expecting retail sales growth to return to more normal levels as backlogs have cleared.
Many UK retailers saw a sudden influx in demand for online sales channels, and have had to modify their processing to meet the new shopping habits of consumers.
Expectations are for monthly retail sales to grow at 2.0% compared to 13.9% in the prior month. Annualized, this would bring retail sales back to the same level as last year, with 0.0% growth compared to -1.6% growth.
Canada Still Riding the Rebound
Canada started reopening its economy later than other countries because they were affected by the pandemic later.
This means that retailers are still processing their backlogs of orders, and figures are going to be significantly higher, amply recovering from the losses during the pandemic.
Processing pending orders is most evident in car dealerships, that experienced inventory supply problems like their peers in the US. Analysts are blaming the lack of trans-pacific shipping for the glut in automotive supply.
Expectations are for Canadian July retail sales to show an increase of 18.7% compared to 17.3% in June. Predictions indicate core (excluding auto sales) figures will come in at 10.6% compared to 12.1% prior