Another month in April of growth in retail sales is probably reason enough for the Reserve Bank to keep official interest rates on hold when it meets tomorrow even though the rise was less than that predicted by financial industry economists. The Australian Bureau of Statistics figures out this morning showed turnover increased by 0.3% in April, following a 2.2% increase in March, a decrease of 2.0% in February and increases for the previous four months including a 3.8% increase in December 2008.
The level of turnover, in seasonally adjusted terms, remains above the level of the trend at November 2008. The median forecast median of 18 economists surveyed by Bloomberg News was for an April increase of 0.5%. According to the same group of economists the Reserve Bank board will probably leave the benchmark rate unchanged tomorrow at 3 percent for a second month to gauge whether the stimulus helps the nation rebound from its first recession since 1991. The Crikey Interest Rate Indicator clearly points in the same direction.