RBA May Hold Off On Rate Rise In December

Due to shoppers tightening their purse strings in September and retail spending having dipped, interest rates could stay unchanged before Christmas.

Sales fell by a worse-than-expected seasonally adjusted 0.2 per cent to $19.7 billion in September compared to August.

The Courier Mail has reported that though economists had predicted a 0.5 per cent rise at the cash registers consumers were reluctant to spend after the Government's $900 stimulus dried up.

Some economists are predicting that the central bank could put interest rates on hold next month before the Christmas spending season.

Consumer confidence had not translated into spending

Alex Joiner ANZ's economist stated that the high levels of consumer confidence seen in September had not translated into spending.

The Northern Territory recorded the largest drop in retail spending of 0.7 per cent followed by Queensland with sales down 0.6 per cent in September.

Across the nation the biggest drop was felt by department stores, down 2.9 per cent, followed by clothing and footwear falling 0.8 per cent.

Although we may not be spending on new clothes we are still however keen to eat out with café, restaurant and take out food sales rising in September by 1 per cent.

Recovery remains fragile

Treasurer Wayne Swan stated that there were signs of resilience and that Australians should be aware that we were the only advanced economy to grow over the past 12 months. He did however point out that our recovery remained fragile.

Data released by the Australian Bureau of Statistics earlier this week showed building approvals had risen by 2.7 per cent in September to 12,476 units.