Consumers appear to have shaken off the federal budget blues, with retail sales rising for the second month in a row.
Australian retail spending rose 0.4 per cent in July, in line with economists' expectations, figures from the Australian Bureau of Statistics show.
Total retail spending was $23.311 billion in July, up from $23.217 billion in June.
Thursday's figures marked the second consecutive month of growth in retail spending.
The data suggested consumers had recovered from negative sentiment surrounding the federal government's May budget, which included a raft of spending cuts and tax hikes, National Australia Bank senior economist David de Garis said.
"Most of the categories of retail spending were up, so it's a somewhat positive start to the September quarter for retail after what was overall a very flat June quarter," Mr de Garis said.
"Consumer confidence numbers have recovered since the budget, we've recovered those pre and post budget confidence losses, at least according to the surveys and that should be supportive of spending."
But despite the recent turnaround, retail sales were still barely growing, Mr de Garis said.
"We have had two positives in a row, but it follows a flat few months so the trend overall is barely growing," he said.
"It's positive but it's not shooting the lights out."
CommSec economist Savanth Sebastian also said there are signs retail spending is bouncing back from the time of the release of the federal budget.
"In particular households were saying that family finances are better than a year ago and that's translating to a pick up in retail activity," he said.
"It was encouraging to see department store sales get a pick up in spending and cafes and restaurants are continuing to be very strong."
Mr Sebastian expects that growth in retail spending will get stronger in the back half of the year.
"Generally that lift in confidence, provided it's sustained in the next few months, should translate into an ongoing lift in retail activity in the lead up to Christmas," he said.
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