Australian retail sales climbed 1.3 % in July

Bloomberg

Australian retailers powered further ahead in July, suggesting cashed-up households are coping well with rapid interest-rate increases.
Sales advanced 1.3%, easily exceeding economists’ forecasts for a 0.3% gain, the Australian Bureau of Statistics said in a statement on Monday. The gain was the largest in four months.
“Turnover rose in five of the six retail industries,” said Ben Dorber, head of retail statistics at the ABS. “This shows that, despite cost-of-living pressures, households are continuing to spend.”
The resilience in consumer spending is likely to reinforce the Reserve Bank of Australia’s (RBA’s) determination to keep tightening after four hikes since May to take the cash rate to 1.85%. The RBA has signalled further increases will come, leading money markets to price in a rate of about 3.25% by year’s end.
The RBA maintains that households are in a strong position to weather higher borrowing costs as they used pandemic-era stimulus to build up savings or make early repayments on their mortgages.
In addition, unemployment at a 48-year low of 3.4% means most Australians have an income to meet their obligations.
Policy makers are closely watching spending patterns for the impact of rate hikes. A sudden weakening could prompt the RBA to pause or slow its tightening cycle as households account for roughly 60% of gross domestic product.
Retail sales at departmental stores climb 3.8%, followed by clothing, footwear.
Personal accessory retailing increasing 3.3% and cafes, restaurants, and takeaway food services also see 1.8% jump in the sales.