Retail spending rises 0.6% in January

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Relatively high confidence among shoppers and the continued drop in the unemployment rate saw modest retail spending growth in the first few weeks of 2021.

The Australian Bureau of Statistics' preliminary figures for retail trade in January showed a 0.6 per cent increase, coming off a 4.1 per cent drop in December.

"There continues to be variations in retail sales between states and territories, as COVID-19 restrictions are tightened or eased in different parts of the country," the bureau's Ben James said.

All states and territories rose in January, except Queensland (-1.5 per cent), where a three-day lockdown impacted trade.

Recording a one per cent rise, NSW led the increases as restrictions that began in December were eased during January.

Westpac senior economist Matthew Hassan said Queensland would likely rebound in February.

"But with both WA and Victoria implementing their own mini lockdowns in February, there will be more disruptions ahead," he said.

"Despite the choppy results the main message both from retail sales and our Westpac Card Tracker is of strong underlying momentum that has been resilient to these disruptions."

CommSec's Craig James said super-low interest rates, job gains and job confidence together with the closure of foreign borders and stimulus payments were encouraging people to spend at local businesses.

However, he said there were mixed results across industry sectors.

Food retailing led the rises, up 1.8 per cent following a 1.7 per cent fall in December 2020.

"The rises were partially offset by falls in clothing, footwear and personal accessory retailing, household goods retailing, and department stores, which were industries impacted by a three-day lockdown in Brisbane," he said.