Australian retail sales rebounded softly in January with economists attributing the rise in spending to volatility rather than a longer-term trend.
Seasonally adjusted retail spending rose 0.4 per cent to $25.73 billion in January, according to the Australian Bureau of Statistics.
The rebound was led by household goods sales, which jumped 1.4 per cent, and cafe, restaurant and catering service sales rising 1.6 per cent.
Household goods sales were boosted by a 2.4 per cent jump in electrical and electronic goods sales.
Hardware, building and gardening supply sales also rebounded 1.1 per cent in January, after falling in December amid discounting due to a liquidation sale ahead the closure of Masters Home Improvement, Woolworths' failed challenger to Bunnings.
Citi economists warns that the monthly pick-up in sales of household goods and at cafes, restaurants and catering services came after a few months of weakness.
"We, therefore, view the bounce as volatility rather than the start of a trend of secular strength, particularly given weakness in wages growth," they said.
"The other reason why we view retail sales growth as weak is because of the ongoing discounting cycle and competitive pressure from new entrants that is keeping price growth well contained."
Capital Economics chief economist Paul Dales said that even if growth in retail sales were to remain at 0.4 per cent in each of the final two months of the first quarter, it appeared that real consumption growth would still struggle to match the December quarter's 0.9 per cent rise.
"And looking further ahead, we remain wary about the outlook for the household sector," he said.
"In particular, tepid wage growth and modest employment growth will probably mean that real consumption growth this year falls short of last year's 2.7 per cent."
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