Australia’s retail sales likely recovered in January after unexpected weak print in December

Australia's retail sales in December had surprisingly not expanded despite the upbeat business sentiment and RBA's reports that its liaison implied healthy consumer demand. The December's data was below all forecast in Bloomberg survey, of which the weakest was a growth of 0.2%. However, with a consistent solid labor market trend, sharp fall in gasoline prices, weak inflation and strong tourist arrivals, retail sales is expected to have recovered in January.

In contrast to December's data, where there was a huge variation between different branches of retail sector, an even expansion is expected in January. Food and beverage and 'other retail' are likely to lead the rebound.