Australians spend big as pre-Christmas shopping hits record

Bloomberg

Australians spent a record-breaking A$74.5 billion ($50.4 billion) in the run-up to Christmas, a sign that rising prices and soaring interest rates have yet to weaken consumer demand.
Retail sales across Australia surged 8.6% between November 1 and Decemebr 24 from a year ago, according to figures released by Australian Retailers Association in partnership with Westpac DataX. Trading on the December 26 Boxing Day holiday hit a record 15.3% growth from a year ago to A$1.23 billion, it said in a statement.
“This is without a doubt, the biggest festive season spend on record — it is unprecedented,” said Paul Zahra, CEO of ARA, which represents Australia’s A$400 billion retail sector. “It is remarkable that in this period of economic turbulence, traders have well and truly smashed it out of the ball park as consumers reveled in ‘freedom’ spending.”
Monthly figures for October showed overall price growth still close to 7%, so inflation will have been a key factor driving up the retail sales numbers, even if the trend had cooled further by December.
Still, the spending figures will form part of the data feeding into Australia’s monetary policy outlook as the country’s central bank tries to slow demand to help tame inflation, without pushing the economy into recession. The bank has repeatedly said household consumption behavior will be a key determinant of how high interest rates go.
The Reserve Bank has lifted interest rates by 3 percentage points from a record low 0.1% in May and has signalled more increases are likely in 2023.