Australian retail sales rose for the third consecutive month in October, pointing to sustained growth in consumer spending.
Retail sales rose at a seasonally adjusted 0.5% to $25.616 billion, following a gain of 0.6% in September that was the fastest in over a year, the national statistics bureau reported Friday. A median estimate of economists forecast retail spending to grow 0.3% in October.
Retail sales are an important proxy for consumer spending, which accounts for more than half of Australia’s gross domestic product (GDP).
Gains were led by food retailing, household goods and cafes and restaurants, which offset declines at department stores and clothing retailers. Growth was strongest in Queensland, Victoria and South Wales.
Retail spending has grown in stops and starts over the past year, but hasn’t declined since August 2015. The recent pickup in spending bodes well for a surge in sales heading into the Christmas season. Such a trend would be consistent with the strength seen in recent consumer confidence data.
The Reserve Bank of Australia (RBA) says consumer spending has been expanding at a reasonable pace, but appears to have slowed recently. This was observed especially in the month of July, where Malcolm Turnbull’s coalition party narrowly retained power in the federal election.
Overall, the Australian economy is outpacing most of its advanced industrialized peers in terms of growth. GDP expanded at an annualized 3.1% in the first quarter and 3.3% in the April-June period.