Retail trade slumps following Trump tariff shock
Retail spending retreated 0.1 per cent in April, despite consumers in Queensland dining out after bearing the brunt of Cyclone Alfred.
Spooked consumers slashed retail spending after Donald Trump’s tariffs sent a shudder through markets.
Turnover fell 0.1 per cent in April after rising 0.3 per cent the month prior, the Australian Bureau of Statistics reported on Friday.
The downturn ends a three-month streak of modest growth to start 2025.
On an annual basis, sales rose 3.8 per cent, down from the 4.3 per cent rise over the 12 months to March.
Consumer confidence took a beating last month, after Donald Trump’s “liberation day” tariff dump on April 2 rattled financial markets and ripped billions from superannuation balances.
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Surveys by Westpac and ANZ showed a marked decrease in reported confidence metrics following the announcement.
Reserve Bank governor Michele Bullock noted growth in consumer spending had been slower than expected since the start of the year, with falling interest rates and rising disposable incomes expected to boost consumption.
“Households are being a little bit cautious,” Ms Bullock said in her press conference following the last RBA board meeting.
“It’s not picking up as much as we thought it might given historical circumstances, but I think we will expect it to pick up.”
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The result would have been even worse if not for a rebound in Queensland following Cyclone Alfred.
Turnover jumped 1.4 per cent in the Sunshine State following a 0.4 per cent contraction in March, with Western Australia the only other jurisdiction to record positive growth in April.
Supermarket sales eased off following a rise in cyclone-related stock-piling, while spending at cafes and restaurants bounced back.
ABS head of business statistics Robert Ewing said spending eased particularly on clothes amid warmer-than-usual April weather while food-related spending was driven by more dining out in Queensland.
“More people dined out and made recovery purchases on household items like furniture and electrical goods,” he said.
The bureau’s retail trade publication will soon be replaced by its new household spending indicator, which provides a more comprehensive overview of household consumption.
The ABS also revealed building approvals sank 5.7 per cent to 14,633 in April, driven by a fall in apartment consents.
Approvals retreated 8.8 per cent in March but have been trending upwards since early 2024.
Numbers remain below historical peaks and well below the pace needed to meet the federal government’s target of 1.2 million new homes over five years.
