Low interest rates and cheap petrol have fuelled a nationwide spending spree, with retail spending growing at its strongest pace in five months.
Retail sales rose 0.7 per cent in February, seasonally adjusted, with Australians splashing $24.1 billion in the month, according to Australian Bureau of Statistics figures.
It was the strongest growth in spending since September and smashed economists’ expectations of a 0.4 per cent rise.
JP Morgan economist Tom Kennedy said Tuesday’s strong result was driven by the Reserve Bank’s February 3 interest rate cut.
“We think the underlying drivers are obviously a pop in sentiment following the RBA cut in February and also some benefit from low petrol prices,” Mr Kennedy said.
National Australia Bank senior economist David de Garis said the figures suggested an improvement in consumer sentiment, amid signs the jobs market was starting to come good.
“We’ve seen a bit of improvement in the labour market, employment growth has picked up a little,” Mr de Garis said.
“Consumers are probably a little bit less worried about the labour market – there are little hints of less anxiety starting to creep in there.”
Economists had expected spending to rise by 0.4 per cent.
In seasonally adjusted terms the largest contributor to the rise was food retailing (1.2 per cent), with household goods retailing also increasing in February.
The data shows falls in department store spending (-3.2 per cent), cafes, restaurants and takeaway food services (-0.4 per cent) and clothing, footwear and personal accessory retailing (-0.2 per cent).
In seasonally adjusted terms there were rises in all states and territories in February 2015.
The largest rise was in New South Wales (0.7 per cent) followed by Victoria (0.8 per cent), South Australia (1.7 per cent), Western Australia (0.7 per cent), Queensland (0.2 per cent), the Australian Capital Territory (1.6 per cent), the Northern Territory (2.3 per cent.) and Tasmania (0.7 per cent).
– with AAP
