Buying S&P/ASX 200 Index (ASX: XJO) stocks and eager for interest rates to reverse course and begin coming down?
You're not alone!
In its ongoing battle to tamp inflation back down to its 2% to 3% target range, the Reserve Bank of Australia (RBA) has hiked the official cash rate 13 times since the current tightening cycle began in May 2022.
That saw Aussie interest rates rocket from the historic low of 0.10% to the current 13-year high of 4.35%.
Unfortunately, October's retail sales data, just released by the Australian Bureau of Statistics (ABS), is unlikely to tilt the RBA towards easing next week Tuesday. The board is set to announce its next rate decision on 10 December.
Here's what we just learned about Australians' latest retail spending habits.
What ASX 200 investors learned from the ABS
In a sign that ASX 200 investors might be waiting longer than desired for that first interest rate cut, the ABS reported that Aussie retail turnover increased 0.6% in October. This follows a 0.1% uptick in September and a 0.7% increase in August.
"After a steady result last month retailers told us that sales activity grew in October ahead of the Black Friday sales," ABS head of business statistics Robert Ewing said.
"The stronger than usual October month saw some retailers enticing buyers to spend early with discounting, particularly on discretionary items."
Electronics retailers saw some of the biggest consumer spending increases over the month.
"The rise in discretionary spending was driven by online discounting events while people also spent more on electrical goods, particularly televisions and other audio-visual equipment," Ewing said.
Good retail news not so good for interest rates
Higher retail spending is generally a good thing for any nation. However, the hot October data could mean ASX 200 investors will be waiting even longer for the RBA to cut interest rates.
RBA governor Michele Bullock has previously noted that uncertainty surrounding the trajectory of consumer spending had contributed to the central bank holding rates steady at 4.35%.
Josh Gilbert, market analyst at eToro, noted that despite the high interest rate environment, "Aussie retail sales figures have been surprising this year. Particularly in the second half as we've had multiple sales reports that have come in well above estimates."
Today's ABS retail sales report is no exception.
Prior to the release of today's data, Gilbert said that another strong month of retail sales "will prove problematic for the RBA as a strong argument for cutting interest rates continues to evade the central bank while Australians appear to be resuming old spending habits even as the back pocket bites."
And with the big consumer spending spree spurred by Black Friday sales, November's data is likely to come in hot once more.
