Retail spending increased by 0.6 per cent in August following a 0.6 per cent rise in July, the Australian Bureau of Statistics said.
Retail trade rose in August to a seasonally adjusted $20.813 billion, compared to an upwardly revised $20.679 billion in July.
According to RBC senior economist Su-Lin Ong, two strong consecutive monthly rises in retail sales numbers showed consumer consumption was tracking along at a reasonable pace for the September quarter.
“I guess we’ve got to bear in mind that retail sales are only a third of private consumption and expenditure on some broader measures has been reasonably resilient,” Ms Ong said.
“Consumers are proving fairly resilient despite very volatile financial markets, a softer labour market and weaker confidence. Details are mixed, especially in the discretionary component. Department store sales and clothing footwear were down, cafes and restaurants were up, so there was a bit of a mixed picture in terms of the discretionary spending.”
Ms Ong said the data should change the likelihood of an interest rate cut.
On Tuesday, the Reserve Bank of Australia (RBA) kept its interest rate unchanged at 4.75 per cent at its monthly board and indicated in its statement that the RBA was open to lowering the cash rate if inflation pressures ease.
As per ICAP senior economist Adam Carr, the figures showed domestic demand was strong.
“All the data does is belatedly match what company accounts, national accounts and the trade data have been telling us, that retail spending is actually quite healthy,” Mr Carr said.