Retailers have criticised the Reserve Bank’s decision to leave the cash rate unchanged at 3.50 per cent as it is only a reflection of sectors that are performing well – retail not being one of them.
The National Retail Association executive director Gary Black said the RBA’s decision to leave interest rates on hold today reflected the strength in sectors such as mining and resources, but would not help the major job-creating parts of the economy such as retail.
“Retail has always been a good barometer of the health of the Australian economy. When you talk to people in retail and service-sector businesses, many of them will say turnover is down by up to 30 per cent compared with last year,” he said.
“Mining and resources may be performing well right now, but they do not offer the employment opportunities to low-skilled and part-time workers that retailers do. Thos jobs are at risk because of the long-term downturn in retail sales.”
In its announcement, RBA governor Glenn Stevens said with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than what it was a few months ago, the cash rate remains appropriate.
“In Australia, most indicators available for this meeting suggest growth has been running close to trend, led by very large increases in capital spending in the resources sector,” he said.
“Consumption growth was also quite firm in the first half of the year, though some of that strength was temporary. Labour market data have shown moderate employment growth, even with job shedding in some industries, and the rate of unemployment has thus far remained low.”