January retail figures show sharp rise, up 0.9 per cent

Enda Curran
March 05, 2013
Dow Jones

AUSTRALIAN retail sales rose sharply in January, in the latest sign deep interest-rate cuts by the country’s central bank are boosting consumer confidence and spending.

January retail sales were up 0.9 per cent from December, the Australian Bureau of Statistics reported today, higher than the 0.4 per cent increase expected by economists. It was the biggest monthly gain in seven months.

Australian retail sales have been in decline since late last year as the country’s mining-dominated economy sputtered amid a slowdown in China, the nation’s biggest trading partner. In December they fell 0.4 per cent.

The Australian dollar rose a quarter of a US cent after the release of the data.

At 11.35am AEDT, the currency was at 102.24 US cents, up from 101.99 US cents shortly before the data’s release.

The January sales pick-up comes as the country’s central bank is due to meet in Sydney later today to set interest rates.

The Reserve Bank of Australia has cut interest rates six times since November 2011 in a bid to revive activity in weaker parts of the economy such as retail spending, manufacturing and home sales.

Consumer sentiment has picked up since the start of the year, buoying expectations that retail sales would also improve.

The positive sales data will fuel speculation that the central bank will keep interest rates on hold this afternoon.