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Investing.com-- Australian retail sales shrank less than expected in December, as strength in the labor market and year-end holiday shopping kept consumer spending relatively strong.
Retail sales shrank 0.1% month-on-month in December, data from the Australian Bureau of Statistics showed on Monday. The reading was better than expectations for a drop of 0.7%.
Australian retail spending usually falls off in December after a strong November, as Black Friday discounting sees cost-conscious customers spend more. But this boost appeared to have spilled over into December, the ABS noted.
“Cyber Monday drove more spending on household goods as consumers took advantage of discounts on big ticket items,” Robert Ewing, ABS head of business statistics, said in a statement.
On a quarterly basis, retail sales grew 1% in the fourth quarter, indicating that spending remained robust.
While growth in Australian retail sales has slowed in recent years, amid pressure from high inflation and interest rates, they have still steadily trended higher, amid support from a robust labor market.
Steady retail spending has also mostly underpinned Australian inflation, giving the Reserve Bank more impetus to keep interest rates high for longer. But a recent, mild decline in inflation saw traders positioning for a February rate cut.