As consumers cut spending, governments keep pumping inflation

Amid the headlines about high inflation and demands for higher interest rates, the ongoing story of the Australian economy is consumers pulling back on spending and being stuck with persistent inflation due to governments.

June’s retail sales data from the Australian Bureau of Statistics showed a headline rise of 0.5% month on month. But that disguised yet another fall in retail volumes for the June quarter, this time of 0.3%, continuing the trend of the past year and a half as consumers continue to shun anything but one-off specials or deeply discounted products.