Consumer confidence fell 5.5% to 92.8 in October, its lowest level in more than three years. The index has now fallen by 11.1% since its recent peak in December 2018 and c.9.0% since June 2019, despite three interest rates cuts aimed at stimulating the economy. While traditional retail sales posted modest growth of 0.4% in August 2019, this disappointed many market commentators who predicted a more significant increase following a flat July result and the external stimulus of the initial interest rate cuts in June and July (noting there has historically been a lag between interest rate reductions and sustained retail sales improvements). Online retail sales reported a much more material increase of 5.7% in August, representing the highest monthly growth this calendar year and more than compensating for the contraction in June (-2.3%) and minor growth in July (0.1%).

Source: Australian Bureau of Statistics

Source: NAB Online Retail Sales Index

Source: Westpac – Melbourne Institute Consumer Sentiment Index