Retail sales posted a better than expected 1 per cent gain in June, backing up a strong rise in May.
Economist forecasts centred on a 0.7 per cent rise in June, and the Australian dollar climbed 0.2 cents to 104.75 US cents immediately after the retail and trade data were released at 11:30am (AEST) by the Bureau of Statistics.
The volume of retail sales was up 1.4 per cent for the June quarter, which also easily beat economist expectations of a 0.8 per cent gain and bodes well for an important part of the nation's economic growth.
The Bureau's figures show food retailing (up 0.9 per cent) and department stores (up 3.4 per cent) were the main drivers of increased sales.
Within food, grocery sales climbed 1.1 per cent, while liquor retailing slipped 0.9 per cent.
Other segments to rise strongly were: other retailing, up 1.4 per cent mainly due to pharmaceuticals, cosmetics and toiletries; cafes, restaurants and takeaway food services, up 1 per cent; and clothing, footwear and personal accessories, up 1.8 per cent.
The only segment to decline in the month was household goods retailing, which slipped 0.2 per cent, led lower by electrical goods.
The Commonwealth Bank's chief economist Michael Blythe says June's retail sales figures show the carbon tax compensation and interest rate cuts are having an effect.
"It's a decent result, it's going to put a floor under second quarter GDP growth, and an indication that economic policy still works, and that if you give cash to consumers they will go out and spend, which is what we've seen in the last couple of months," he told Reuters.
"I guess it validates the RBA's view they can sit back for a while and just assess what effect these measures are having, but certainly so far it seems to be positive." Turnover rose in all states, with a 1 per cent rise in New South Wales doing most to boost the national figures.
Sales in the Northern Territory grew most strongly, up 2.8 per cent, with Queensland recording a 1.2 per cent rise in sales, Western Australia 1 per cent, Tasmania 1 per cent, Victoria 0.9 per cent, ACT 0.9 per cent and South Australia 0.7 per cent.