Australia retail sales rose 1.1%, or AUD 350.2m, in April, above expectation of 0.5% mom. Annually, sales rose 25.1% yoy.

Ben James, Director of Quarterly Economy Wide Surveys, said: “Food retailing led the rises in April, following falls in both February and March 2021. All industries except department stores rose, with similar rises for cafes, restaurants, and takeaway food services, household goods retailing, and other retailing.

New South Wales and Victoria led the state rises, with sales continuing to return in Sydney and Melbourne. A lockdown in Western Australia in April saw a 1.5% fall in that state”

Full release here.

Australia PMI Manufacturing rose to 59.9 in May, up from 59.7, hitting another record high since May 2016. PMI Services dropped to 58.2, down from 58.8. PMI Composite also dropped slightly to 58.1, down from 58.9.

Jingyi Pan, Economics Associate Director at IHS Markit, said: “Australia’s private sector growth eased from April’s survey record. That said, growth remained sharp to affirm the continued improvement in economic conditions following the easing of COVID-19 restrictions.

“Export orders notably continued to improve, reflecting the robust external demand despite concerns of rising COVID-19 cases in the region. In turn, this filtered through to the labour market with employment improving at the fastest pace in the survey’s five-year history.

“The outlook for activity over the coming year remained optimistic, particularly in the service sector in May. Ongoing supply-chain disruptions, however, continued to impact private sector firms, pushing up input cost inflation and thereby output prices.”

Full release here.

Australia employment dropped -30.6k in April worse than expectation of 15k rise. Full-time jobs rose 33.8k while part-time jobs dropped -64.4k. Total employment was 45.9k, or 0.4%, higher than March 2020 level. But unemployment rate dropped to 5.5%, down from 5.7%, better than expectation of 5.5%. Participation rate dropped -0.3% to 66.0%.

“We have not seen large changes in the indicators that would suggest a clear JobKeeper impact, such as an increase in people working reduced or zero hours for economic reasons or because they were leaving their job. We also haven’t seen large net flows out of employment across many population groups,” Bjorn Jarvis, head of labour statistics at the ABS said.

Full release here.

Australia Westpac-Melbourne Institute consumer sentiment dropped -4.8% mom to 113.1 in May, down from 118.8. Still, it’s the second highest print for the index since April 2010. Westpac said, “The fall may also represent some disappointment in the Federal Budget as a very generous Budget was still unable to exceed the exuberant expectations of the community.”

On RBA policy, Westpac expects the board to extend QE to a further AUD 100B starting in September, and to switch the target bond in the yield curve control from April 2024 to November 2024. It said, “this view is based on the expectation that the Board will be committed to monetary stimulus (reducing QE or restricting YCC to the April bond are akin to tightening policy) for the remainder of 2021.”

Full release here.