- Russell Zimmerman, Executive Director of Australian Retailers Association
Retail sales in Australia rose in October, as Australians were more willingly open their purses in the lead up to Christmas, adding to signs that consumer confidence is gaining momentum. According to the Australian Bureau of Statistics, the retail sector recorded a seasonally adjusted 0.5% gain in turnover in the reported month, following a 0.4% increase in both August and September. The biggest contributor to the advance was department stores, where sales surged 3.5%. Measured on an annual basis, retail sales advanced 3.9%, which was below the pace of growth seen in recent years. The Australian Retailers Association and Roy Morgan Research predict Australian shoppers to spend $46.8 billion this Christmas, in the six weeks from November 15 to December 24.
The data published earlier this week showed that final household consumption climbed a seasonally adjusted 0.7% in the third quarter, and final expenditure contributed 0.5 percentage points to GDP growth over the quarter. The boost in confidence was partly due to the recent improvements in the labour market, where the jobless rate has stabilized over the last year at around 6%, compared with the central bank's estimates that it would have peaked at a higher level already. Moreover, low interest rates are also continuing to support spending, although Australia's major banks raised mortgage rates in October, which eased support slightly.
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