Australia’s Retail Sales surged ahead in March amid growing confidence among consumers. The month saw the public purchase 2.2% more in goods than they had in February. Expectations called for the figure to only increase by 0.5%. The largest occurred in department stores, with such expenditures growing 13.2% in the month. Much of this sub-sector spending may have come on the back of apparel purchases which rose 6.4%. Keep in mind that the Australian winter is just around the corner and that as the weather gets chillier that the public changes its seasonal dress. That is, significant increases in the purchases of such goods are expected during this time of the year.
Furthermore, this jump in data alone might not be indicative of a recovering economy. Government stimulus may have attributed to the gains seen. Cash handouts from Prime Minister Kevin Rudd and company topped A$950 to each consumer during the March and April months. Despite this optimism, a lurking fear may be peering around the corner. The trade balance grew by 42% in March. Much of this jump came on a 3.2% decrease in imports. This occurred at a time where the Australian Dollar rose over 10% on a trade-weighted basis. The combination of cash handouts along with rising currency value would lead an observer to hypothesize that imports would increase. But, such a case is not reality. Therefore the government's stimulus may not have had the desired effect that some might believe.
