SYDNEY (Reuters) - Australians took a break from shopping in November after a couple of busy months, though sales of household goods stayed brisk and plunging petrol prices will be adding to spending power.
Friday's data from the Australian Bureau of Statistics showed retail sales edged up 0.1 percent in November to A$23.76 billion (13 billion pounds). Some slowdown was expected following gains of 0.4 percent and 1.3 percent in the previous two months.
Eating in and eating out remained popular, but sales of clothing, drugs and recreational goods took a dip.
Sales of household goods rose again to be up almost 7 percent over the three months to November amid a rush to furnish new homes or renovate existing ones.
Data out this week showed approvals to build new homes soared to record highs in November, promising an extended boom in construction and spending.
It is timely, then, that consumers are getting a boost to spending power from the collapse in oil prices.
"Over the last six weeks, petrol prices have fallen by 21 cents a litre – the biggest fall for an equivalent period in six years," said Craig James, chief economist at CommSec.
Analysts estimate that back in September the average Australian motorist spent around A$240 a month on petrol - now the bill comes to only A$160.
That saving is the equivalent of more than a quarter point cut in mortgage rates, meaning the fall in oil is loosening financial conditions with no need for action from the Reserve Bank of Australia (RBA).
Markets are still wagering that interest rates will have to be cut again to support growth, but the odds have been slowly lengthening as oil reached new lows.
"The Reserve Bank would no doubt be delighted at the extra stimulus for the economy – stimulus that is arguably non-inflationary," said James about the drop in petrol costs.
Indeed, consumer price figures for the fourth quarter due later this month are expected to show the fall in petrol shaved at least 0.2 percentage point off inflation, setting the scene for a very benign reading.
Early predictions are that headline inflation could slow to 2.0 percent or less, and thus at the very bottom of the RBA's long term target band of 2 to 3 percent.