Retail sales confirm SA consumer is over the worst

January was another decent month for retail sales. The trend is now clearly improving and reinforces the view that the consumer is over the worst. It is noteworthy that for the first time semi-durable components such as clothing and furniture are also beginning to improve, which suggests that the improvement in consumption spending is becoming more broad-based. Judging by yesterday’s consumer confidence numbers, we can expect this trend to gather further momentum in the months ahead.

Most of the activity data released in the last month or two have surprised on the upside. Every one of these sees the prospects of another rate cut dimming further.