“Some of this will be attributable to rising prices, but even so, there seems to be a lot of recovery spending by consumers, especially in the clothing, footwear and personal accessories and department store sectors,” he said.
ANZ Senior Economist Adelaide Timbrell said one of the factors supporting the retail sector was the gradual return of tourists and Australian expats.
A net 110,600 people entered the country in July compared to a net exodus of 150,500 people in June.
Timbrell said net arrivals abroad would continue to support retail trade, downplaying concerns that the sector was about to suffer a sharp downturn.
“We expect a slowdown in consumption eventually, and spending seen by ANZ shows a slightly slower momentum in spending in August compared to ‘normal’ seasonal variation, but we are still far from seeing a cliff in spending,” he said.
But Commonwealth Bank Senior Economist Belinda Allen warned that the increase in July occurred largely before consumers began to feel the full impact of that month’s interest rate hike.
“At Commonwealth Bank, for example, there is an average delay of three months between a cash rate increase and the highest refund being deducted from a customer’s bank account,” he said.
“Between August and December, this interest rate impact quadruples based on the policy changes already announced. This impact will increase again depending on what the RBA does with the cash rate in September and beyond.”
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