Consumers spent a record $19.35 billion in April, making the most of the Federal Government's cash handouts and despite experts' negative predictions for the economy.
Sales rose 0.3 per cent for the month, seasonally adjusted, the Australian Bureau of Statistics said. That follows a 2.2 per cent increase in March.
April's sales marked six months of increases out of the past seven. Economists had expected a 0.5 per cent increase for the month.
''These figures support a government looking to justify its stimulatory measures,'' said Moody's Economy.com's Matt Robinson.
Mr Robinson said the figures reflected the second phase of the cash bonus.
''It suggests Aussie households are in a lot better position than households in other major industrial economies."
Sales of household goods climbed 3.9 per cent, seasonally adjusted, the ABS said, along with clothing and soft goods, which rose 0.8 per cent in April.
Department stores sales slumped 2.8 per cent, seasonally adjusted, in the month, as consumers put off larger purchases. Business at cafes and restaurants slumped 0.5 per cent.
In October, the Government released its first round of stimulus cash payments, which were aimed at pump-priming consumer spending to help stave off a recession. In February, another round of cash spending was announced, taking the total to $52 billion.
Despite that, the pace of the economy has slowed, with a slump in demand for products and a weakening job market.
The Reserve Bank has also chopped 425 basis points from official interest rates since September, bringing the cash rate to a 49-year low of 3 per cent. The RBA will meet again tomorrow to decide whether to cut the interest rate again. It is widely expected the central bank will leave rates unchanged.
On Wednesday, the nation will learn how effective the central bank and the Government's actions have been when first-quarter gross domestic product figures are released. Analysts surveyed by Bloomberg expect a 0.2 per cent contraction in GDP, following the fourth-quarter's 0.5 per cent shrinkage.
Two back-to-back quarters of negative numbers are the technical definition of a recession.
Sales were unchanged in Victoria but rose 1.3 per cent in New South Wales. In Queensland they grew 0.8 per cent, while in Western Australia, the other major mining state, they fell 2.4 per cent. In the Northern Territory sales fell 4.6 per cent.
czappone@fairfax.com.au
BusinessDay
