Retail spending growth has slipped to a two-and-a-half-year low, pointing to slowing economic momentum in early 2016.
Sales were flat in February, dragging the annual rate down to 3.3 per cent, the slowest since September 2013. Previously, it was four per cent.
Softer results from retail trade and job ads, and a consolidation in home building data released on Monday suggest mild economic weakness in the first quarter, RBC Capital Markets fixed income and currency strategist Michael Turner said.
This is unlikely to prompt a significant change of language from the Reserve Bank at tomorrow's interest rate policy meeting, he said.
"(But) we continue to see the data as moving further toward justifying an eventual resumption of this easing cycle," he said.
Household consumption was the clear driver of December quarter economic growth, however retail sales over the past three months had been decidedly weak, CommSec chief economist Craig James said.
Annual growth in non-food retail, a proxy for discretionary spending, hit at a 15-month low in February, he said.
AMP Capital Investors chief economist Shane Oliver said the weak overall result may reflect very low retail price inflation.
"(It) may also reflect the waning impact from last year's interest rate cuts and slowing wealth gains from housing as house price gains slow in Sydney and Melbourne," Dr Oliver said.
But CommSec's Mr James said the outlook for retailers appeared healthy given the consumer backdrop.
"Lower petrol prices, firm confidence levels, solid home construction and healthy employment should all serve to boost spending levels," Mr James said.
"However, the volatility in stockmarkets and the uncertainty over the timing of a early federal election will weigh on activity over the short term."
Mr James also warned that weak wages growth could hurt consumer spending over the longer term.
There was weakness in the cafes and restaurants category in the month, while department store and household goods sales both rose 0.4 per cent.
Total retail spending was $24.84 billion in February, up from $24.83 billion in January, the Australian Bureau of Statistics said on Monday.
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