According to Jinshi, Marcel Thieliant, chief economist of Capital Economics, said that the weakness of Australia's retail sales in April is consistent with the view that inflation will reach the upper limit of the Reserve Bank of Australia's 2%-3% target range in the second half of the year. The monthly rate of retail sales in April was 0.1%, lower than market expectations, and did not reverse the sharp decline in March. Retail sales will almost certainly fall again in the second quarter, which will mark the sixth contraction in the past seven quarters.

One important reason why the Reserve Bank of Australia did not react to the surprise of rising inflation in the first quarter is that it lowered its forecast for consumption growth. Long-term weakness in consumption could open the door for the Reserve Bank to cut interest rates early.