Australia’s national accounts for the March quarter provides a clear narrative about the state of the consumer in 2023. Wages growth is very strong and even though interest rates are starting to bite, households are still spending. They have lowered their savings and switched spending to travel and recreation. The retail downturn thus far is only partly attributable to higher interest rates. The combination of a continued switch in spend outside of retail and higher interest rates mean the downturn will become more acute over the next six months. We may not see a return to trend growth in retail until 2025.