Australian retail sales rose in February due to increased spending power

Australian retail sales rose modestly for a second straight month in February. According to Reuters, the long-awaited cut in interest rates and easing inflation have begun boosting consumer confidence and spending power. However, tepid spending suggests Australians remain cautious with their finances.

Retail sales edged up 0.2% in February from January, slightly below the 0.3% growth economists had expected. According to the Australian Bureau of Statistics, this modest increase was largely driven by stronger food sales, while demand for household goods softened.

A rebound in consumer spending has helped the economy to stabilize after a long period of meager growth. While the Reserve Bank of Australia held rates steady at 4.1% this week, analysts suggest the upcoming quarterly inflation data may affect the officials’ decision in May.