There are early signs the next set of official economic growth figures will be a little more upbeat.
Consumers appear to have got over their post-budget blues, while exports are on the move again.
Economists believe new figures suggest the economy will be looking healthier in the second half of 2014 after June quarter growth figures proved a bit disappointing.
Retail spending grew 0.4 per cent in July to a record $23.3 billion, continuing a recovery in consumer confidence from the sharp negative reaction to the May budget.
Thursday’s numbers showed that even the ACT, which will bear the brunt of public service job cuts, enjoyed a 2.6 per cent retail surge in July – the first positive growth in the national capital since December 2013.
The strongest growth across the nation was in department stores, dining out and food retailing.
The result provided some optimism for retailers who believe consumers have got over their anxiety about the budget.
“This gives us hope that the trend will continue as the warmer months arrive,” National Retail Association chief Trevor Evans said.
That’s the spring fashion season and the lead-up to the vital pre-Christmas trading period.
Australian Retailers Association boss Russell Zimmerman isn’t getting too carried away, urging the Reserve Bank to keep interest rates low.
After being a large drag on economic growth in the June quarter, exports too rose in July to outpace flat imports.
It meant the monthly international trade deficit improved for a second month in a row to $1.36 billion, after topping $2 billion in May.
RBC Capital Markets strategist Michael Turner said while the trade figures are starting the September quarter on a better note, the ongoing slide in spot commodity prices – especially iron ore – suggest surpluses are unlikely in the near term.