Australian retail sales accelerated in October for the third consecutive month, reflecting growing consumer confidence as expectations lean toward a potential interest rate cut in the future. Sales rose by 0.6% from the previous month, surpassing the forecasted 0.4% increase, according to data released by the Australian Bureau of Statistics (ABS) on Monday. This follows a modest 0.1% rise in September.  

“The stronger-than-usual October was driven by early discounting from some retailers, particularly on discretionary items,” said Robert Ewing, ABS head of business statistics. He noted that online discount events and higher spending on electrical goods, including televisions and audio-visual equipment, fueled the increase in discretionary spending.  

Retail sales play a significant role in policy considerations as consumption accounts for over half of Australia’s gross domestic product. The Reserve Bank of Australia (RBA) has repeatedly identified household spending as a key area of uncertainty. Despite holding interest rates steady at 4.35% throughout the year, the RBA continues to monitor economic conditions closely.  

On an annual basis, retail sales in October were up 3.4%, a marked improvement from the 1.2% growth seen in October 2023.  

As the RBA prepares for its meeting next week, economists widely expect no change in rates until 2025. Governor Michele Bullock recently emphasized that inflation remains too high to consider rate cuts in the near term.  

Paraphrasing text from "Bloomberg" all rights reserved by the original author.