He never pulls his punches:
"A major reason for that, and as I mentioned after the December 7 rates decision, is that I’m not a subscriber to the cautious consumer argument. There isn’t a lot of reliable evidence for it and to be honest, I’m not sure where it comes from. I mean think back to early-mid 2010, when all the data points were unequivocally showing strong consumption growth. People were still talking as if the sector was sluggish – though based on what? Nothing. Note that it’s these same people who are most vocal about consumer softness now. They would make this claim and have, regardless of what the facts show. Really the only suggestions for it now are the anecdotes of some vocal retailers (which I think are completely unreliable) and the monthly retail sales numbers. The problem here though is that, and as I’ve discussed previously, the monthly retail numbers have been very volatile, indicating within the space of months, both solid sales and weak sales. So which one is it?
Well maybe this statistic will help clear things up. Note that for all the talk of depressed retail sales etc, the sector has been a solid employer this year – up 2.8% YTD (slightly above the industry average). I reckon it’s very much a case of believe what they do, not what they say. This fits in much more closely with consumer spending more broadly as indicated in the national accounts (including the retail component which is solid -average 4 qtr growth of 0.8%) and other data. Jobs growth more broadly is very strong, incomes growth is robust. It’s absurd to think that none of this is flowing into the retail sector – what!? All these newly employed people no longer need to buy toasters and clothes and stuff? Bull #$%&! It’s absolutely absurd to think that and at the end of the day, the weight of evidence strongly supports my view that retail spending is robust. Indeed I don’t think arguments to the contrary are even reasonable and so my strong recommendation is to not buy into it one bit."
