Australia's May retail sales growth likely to post solid trend

Australia's retain sales data for May is scheduled to release on 3rd, July.
Despite stagnating in April, an expansion in May retail sales is expected, but merely in line with trend at 0.3% mom (identical to the average gain in 2014 and over the past five years), states Societe Generale. 

Nevertheless, this would raise the gain to 4.8% yoy from 4.1% in April, indicating that while not exactly buoyant, there is not much wrong with retail sales in Australia. In fact, given that disposable income growth in Q1 was a mere 2.6% yoy, the pace of retail sales growth is remarkably strong (though the degree of weakness in disposable income growth is unlikely to persist in our view). 

"Specifically in May, food sales are likely to have recovered after an atypical outright decline in April (and they account for about 40% of all sales), but apparel sales are likely to have eased back after very large increases in March and April. The second largest sector, household goods, is expected to have expanded marginally, thus maintaining recent strength. Catering is also expected to continue to show solid growth", adds Societe Generale.