Canberrans were the nation's most enthusiastic shoppers in July, with turnover at the territory's stores growing at double the national average. But the pace of consumer spending is continuing to decline across the country as soaring housing and living costs eat into family budgets, pushing annual sales growth down to 2.1 per cent - its weakest reading in almost two years. The result is likely to reassure the central bank that its monetary policy is tight enough to dampen demand, increasing the chances that interest rates stay on hold for a third consecutive month when the Reserve Bank of Australia board meets on September 5. The FIFA Women's World Cup and the school holidays helped drive a 1.3 per cent increase in spending at cafes, restaurants and on takeaway food, according to Ben Dorber, head of retail statistics at the Australian Bureau of Statistics. But other food spending was flat. There was a stronger increase in turnover at department stores (3.6 per cent) and on clothing and footwear (2 per cent), but sales of household goods barely increased and Mr Dorber said the overall picture was of subdued spending. Overall turnover for July grew by a modest 0.5 per cent, and followed a sharper 0.8 per cent fall in June. "The rise in July is a partial reversal of last month's sharp decline in turnover. This was after weaker-than-usual end of financial year sales," Mr Dorber said. "While there was a rise in July, underlying growth in retail turnover remained subdued." Markets expect the central bank to keep interest rates on hold for an extended period and several economists expect the next rates move will be a cut, although likely not until early next year. KPMG chief economist Brendan Rynne said the retail results were "unlikely to cause the RBA to raise rates next week". Dr Rynne said the fluctuations in retail turnover in the past three months were consistent with his view that any significant recovery in spending will not become evident until late next year or early 2025. READ MORE: But ANZ economists Madeline Dunk and Adelaide Timbrell were slightly more upbeat. The economists said it was clear that households were cutting back on their spending and expected this trend to continue through the rest of the year. "We do, however, see some upside to spending in 2024 as inflation moderates and real household incomes turn positive," they said. Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
