A surprising rise in retail sales during November could slow the pace of Reserve Bank cuts to interest rates, an economist says.
Retail sales rose 0.4 per cent in November in seasonally adjusted terms, figures from the Australian Bureau of Statistics (ABS) show, far above the market's forecast of a 0.3 per cent fall.
ANZ senior economist Katie Dean said the retail result was much better than expectations, with consumers not as reticent as many feared.
"Clearly lower interest rates and also lower petrol prices have given households some reason to be a little bit more confident in their spending," Ms Dean said.
"Part of this could be inflation related, that is from the weaker currency flowing to higher prices."
"Volumes did probably hold up pretty well."
Australian retail trade at current prices rose 0.1 per cent in November in trend terms to $18.423 billion, from an upwardly revised $18.398 billion in October.
The trend estimate rose 1.9 per cent over the year.
The market forecast was for a trend rise of 0.1 per cent in November.
Ms Dean said the anecdotal reports about Christmas shopping indicated a good result for December.
"The reports that the Christmas season went pretty strong does suggest the consumer sector will make a pretty positive contribution to growth in the fourth quarter," she said.
The better than expected result for November and the upward revision for October would have the central bank toning down their aggressive rates cuts, though more were to come, Ms Dean said.
"It will be a more modest approach to easing policy from here," she said.
"We do expect further cuts given the deterioration in the global environment.
"Also we do expect the consumer sector will weaken over 2009 as the unemployment rate climbs."
