Australians were out wining and dining in April as they enjoyed an unusually balmy autumn.
New figures show spending at cafes, restaurants and takeaways jumped 1.3 per cent in April, the biggest rise in six months, which helped to lift retail activity overall after a flat result in March.
The 0.4 per cent rise in retail spending in April coincided with a gradual climb in consumer confidence heading into the May budget in anticipation it would include personal income tax cuts.
While the warm weather encouraged the trend to dine al fresco, conversely it had a negative impact on spending on clothing, footwear and accessories which declined 0.8 per cent in the month.
Commonwealth Bank economist Belinda Allen believes the outlook still remains challenging for retailers with households weighed down by weak income growth, high debts and falling housing prices.
However, she says good employment growth does remain positive for spending.
On that score, the ANZ job advertisements series rose 1.5 per cent in May, more than reversing a cumulative 0.7 per cent fall over the previous three months to hit a seven-year high.
"Despite somewhat mixed employment reports this year, we remain of the view that Australia's labour market will remain solid through 2018," ANZ head of Australian economics David Plank said.
The latest national accounts on Wednesday should also show more upbeat economic growth, supporting demand for workers.
Economists were already forecasting a solid 0.8 per cent rise in March quarter growth before other new data on Monday suggested the expansion could be even larger.
Company profits proved stronger than expected in the first three months of the year, surging 5.9 per cent.
Larger business inventories in the quarter - stock on shelves and in warehouses - are also expected to add 0.2 percentage points to the growth calculation when economists had expected them to be unchanged from the previous quarter.
A 0.8 per cent growth result would be double the rate recorded during a disappointing outcome in the final three months of 2017.
It would lift the annual growth rate from 2.7 per cent from 2.4 per cent previously.
Economists will finalise their forecasts after international trade and government spending data are released on Tuesday.
The Reserve Bank will also hold its monthly board meeting on Tuesday.
Recent benign prices and wage growth figures suggest the central bank will leave the cash rate at a record-low 1.5 per cent for a while longer.
While the OECD warned last week a rate rise could come towards the end of the year as wages and inflation growth start to pick up, local economists think a move is more likely next year.
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