Consumption headwinds on the rise even as retail sales tick up

It’s not benefitting from steady wage growth and low inflation.

Consumption headwinds are on the rise although retail sales ticked up in May, according to a report by JP Morgan.

Sales volumes rose mainly due to higher vehicle and telco sales, but still left nominal sales somewhat weaker than expectations.

“Though stable wage growth and negative inflation prints over the past few months should have buoyed households’ purchasing power, these tailwinds on private consumption have not translated into a convincing pickup in spending in Singapore. Indeed, the recent trend in the retail sales data has largely reflected large swings in spending on computer and telco goods. This was still true of the April data, with a 9.2%m/m sa jump in sales in this category—we suspect this reflects the launch of new smartphones in the month. Sales outside of autos and tech remained weak for the most part,” said JP Morgan.