(Updates with comment from economist in fourth paragraph, currency in fifth.)
Oct. 5 (Bloomberg) -- Australian retail sales advanced more than economists forecast in August for a second straight month as consumers spent more on household goods and dining out.
Sales rose 0.6 percent from a month earlier, when they increased a revised 0.6 percent, the Bureau of Statistics said in Sydney today. The median forecast in a Bloomberg News survey of 22 economists was for a 0.2 percent gain. Spending on household goods jumped the most since February.
Reserve Bank Governor Glenn Stevens yesterday held the benchmark interest rate at 4.75 percent for an 11th month as consumers turn cautious and to gauge the fallout from Europe’s debt crisis. Australian economy, which has avoided a recession for two decades, is continuing to get a lift from mineral extraction.
“This is a good report belatedly highlighting what other data points have been telling us for some time,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s biggest interdealer broker. “Spending remains healthy.”
The Australian dollar was little changed against the U.S. currency after the release. It traded at 95.15 U.S. cents at 12.02 p.m. in Sydney from 95.72 cents yesterday in New York and 95.15 cents before the data.
Spending on household goods rose 1.7 percent, and consumers spent 1.2 percent more at cafes and restaurants, today’s report showed. They spent 0.8 percent less at department stores and 0.3 percent less on clothing, it showed.
Wesfarmers Ltd., Australia’s second-largest retailer, said fourth-quarter sales from its Coles supermarkets rose 7.2 percent as cheaper milk and bread lured customers.
Revenue at Coles rose to A$8 billion ($7.6 billion) in the three months ended June 26 from A$7.4 billion a year earlier, Perth-based Wesfarmers said in a July 28 statement. The sales growth rate compares with the 7.4 percent median estimate of three analysts surveyed by Bloomberg News.
Australia’s household savings rate held above 10 percent in the three months through June, when the economy expanded 1.2 percent, the fastest pace in four years, spurred by household spending and a recovery from natural disasters in the northeast.
The RBA boosted its rate seven times from October 2009 to November 2010, tempering a rise in consumer debt, which more than tripled in the past 20 years to 153.7 percent of disposable income in the second quarter.
Yesterday, Stevens signaled a willingness to lower rates if necessary amid global financial turmoil that slows Australia’s economy. “An improved inflation outlook would increase the scope for monetary policy to provide some support to demand, should that prove necessary,” he said.
Myer Holdings Ltd. Chief Executive Officer Bernie Brookes said consumer confidence in Australia is at a three-decade low and doesn’t expect any improvement in at least six months.
“The poor consumers are being bludgeoned,” the CEO of the nation’s biggest department-store chain said in a Sept. 27 interview. Sales during the Australian winter slumped as much as 5 percent, he said, and Christmas will be a “bit better” this year after being “so bad last year.”
--With assistance from Daniel Petrie in Sydney. Editors: Brendan Murray, Victoria Batchelor
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