Three things to watch for the week ahead: retail sales, rate decision, Aussie unemployment

1. Retail sales

The Australian Bureau of Statistics (ABS) will release retail sales figures for December on Wednesday. Economists are expecting a 0.3% rise in sales, following a 0.9% increase in November. A strong result would be a sign that the economy is continuing to recover from the COVID-19 pandemic. However, a weak result could raise concerns about the strength of the recovery.

Retail sales are a key indicator of consumer spending, which is about 60% of Australia's economic activity. A strong rise in sales would suggest that consumers are confident about the future and are willing to spend money. This would be a positive sign for the economy.

However, a weak result could raise concerns about the strength of the recovery. Consumers may be hesitant to spend money if they are worried about the future. This could lead to a slowdown in economic growth.

2. Rate decision

The Reserve Bank of Australia (RBA) will meet on Tuesday to decide whether to raise interest rates. Economists are expecting the RBA to keep rates on hold at 0.1%. However, there is a chance that the RBA could raise rates if it is concerned about inflation.

The RBA has been keeping rates on hold since November 2020 in an effort to support the economy during the COVID-19 pandemic. However, inflation has been rising in recent months, and the RBA may be forced to raise rates to keep inflation under control.

If the RBA does raise rates, it would be the first rate rise since November 2010. A rate rise would make it more expensive for businesses to borrow money, which could lead to slower economic growth. However, a rate rise could also help to cool inflation.

3. Aussie unemployment

The ABS will release the latest unemployment figures for December on Thursday. Economists are expecting the unemployment rate to remain steady at 4.2%. However, there is a chance that the unemployment rate could rise if the economy slows down.

The unemployment rate is a key indicator of the health of the labor market. A low unemployment rate suggests that there are plenty of jobs available and that the economy is growing. However, a high unemployment rate suggests that there are not enough jobs available and that the economy is struggling.

The unemployment rate has been falling in recent months, and this is a positive sign for the economy. However, the unemployment rate is still higher than it was before the COVID-19 pandemic. This suggests that the labor market is still recovering from the pandemic.