Shoppers opened their wallets in November as retail had its largest rise since the end of the federal government's cash stimulus payments in March, economists say.
Australian retail trade at current prices rose 1.4 per cent in November to a seasonally adjusted $20.081 billion, from a revised $19.802 billion in October, the Australian Bureau of Statistics (ABS) said on Thursday.
It was the largest monthly increase in retail sales since March 2009 and greater than the market forecast of a 0.3 per cent rise.
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Food, clothing, footwear all up
Commonwealth Bank senior economist Michael Workman said strong sales increases in the large segments of department stores and food retailing boosted overall turnover in November.
Turnover in clothing and footwear rose 2.5 per cent in November, household good sales were 1.7 per cent higher and food retailing was up 1.6 per cent.
"Total retail sales growth is seven per cent (in annual terms), which is very strong," Mr Workman said.
"It follows a period that has been pretty choppy for retail activity since the end of that cash stimulus in March."
The monthly rise in November bucked the weak growth from the previous six months, Mr Workman said.
"Retail figures had been averaging a 0.1 per cent rise from April through to October, now we have had this extraordinary 1.4 per cent," he said.
"Some of those comments by retailers were accurate that November looked to be quite strong, which is fairly good news.
"We don't think that will carry over to December, judging by the sales activity that occurred but it is still pretty welcome news."
Mr Workman said the Reserve Bank of Australia (RBA) would have been aware of the improvement in the retail sector during November when it lifted the overnight cash rate in November and December.
The central bank raised the cash rate three times in October, November and December to its current 3.75 per cent.
"This historical piece of information most probably confirms why they were putting rates up in November and the December rate rise reflected what they were expecting to happen with retails sales in the next four to five months," he said.
