The Reserve Bank yesterday announced that the official cash rate will remain unchanged at 4.5% for the second month running, an extended rate pause sure to bring a smile to the faces of retailers across the country. The ABS reports that retail sales rose 0.2 per cent in May, down from the 0.6 per cent rise recorded in April. It's believed a clothing, footwear and department store sales push drove the modest May increase. Clothing, footwear and other personal accessory retailing (1.7%) and department stores (1%) recorded the largest increases in May. Next best were cafes, restaurants and takeaway food services (0.8%), other retailing (0.3%) and food retailing (0.2%). Household goods retailing fell by 1.4 per cent.

"New South Wales and Victoria recorded increases in sales in May," an ABS spokesperson says.

"Sales decreased in the other states and territories." New York-based financial blog DailyMarkets.com reports that the sluggish figures were below industry expectations. "The Australian Bureau of Statistics said retail sales were up a seasonally adjusted 0.2 per cent month-on-month in May to A$20.16 billion," DailyMarkets reports.

"This was slightly worse than expectations for a 0.3 per cent increase and slower than the 0.6 per cent rise in the previous month." Retail sales had risen 0.8% in March. "The slowdown suggests household spending is being squeezed by the Reserve Bank of Australia’s rate rises and may persuade the central bank to stand pat for some time."

Source Textile News.