AAP
Retail spending was relatively flat in February, according to an indicator measuring electronically processed sales.
The Commonwealth Bank of Australia's business sales indicator (BSI) tracks the value of credit and debit card transactions processed through Commonwealth Bank point-of-sale (POS) terminals.
The BSI rose by 0.1 per cent in trend terms in February after being unchanged in January to be 4.4 per cent higher than February last year, the bank said.
In seasonally adjusted terms, the indicator rose by 0.1 per cent in February after increasing by 0.2 per cent in January 2010.
Craig James, chief economist at the Commonwealth Bank's broking arm CommSec, acknowledged the 1.2 per cent seasonally adjusted rise in retail trade for January reported by the Australian Bureau of Statistics (ABS.
However, he warned the results for December and January were notoriously difficult to adjust due to volatile seasonal effects.
The trend BSI measure showed transaction values rose in only 11 of the 20 industries in January, although that was better than January when just eight of the 20 sectors rose.
The strongest sector was service providers, with a trend growth rate of 1.8 per cent per month, while transactions for mail order/telephone order providers fell at a 3.4 per cent monthly rate.
While consumer and business confidence were a higher than a year ago, this did not seem to be flowing through into better retail conditions, Mr James said.
"At the Commonwealth Bank, we're predicting the Reserve Bank will keep interest rates on hold in April.
That policy would be supported by the slight rises in the BSI, which were "nothing to get excited about".
"Until we start seeing a marked improvement in consumer spending, the Reserve Bank would be wise to tread very carefully when it makes its next interest rate decision in April,", Mr James said.
