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Growing signs of solid economic growth

Growing signs of solid economic growth

Fri August 3, 2012 5:09pm

WHATEVER Wayne Swan's political motivation, his well-documented John Button lecture this week could give the music sales of an ageing US rock star a new lease of life Down Under, and a tiny boost to retail spending.

We won't know until the local charts are released next week if there's been a Swan effect on the music of Bruce Springsteen.

But it all helps.

New figures this week pointed to some relief for the retail sector, after the lean years of consumer spending since the 2008-2009 global financial crisis.

Brimming with cash from early-stage carbon compensation handouts, the new schoolkids bonus and savings from recent mortgage rate cuts, consumers pushed retail spending up one per cent in June, after growth of 0.8 per cent in May.

All of the sales categories monitored by the Australian Bureau Statistics (ABS) expanded - apart from household goods - with department stores in particular posting solid growth for a second month in row.

As a result, turnover for the June quarter soared 1.4 per cent, compared to the previous three months, providing a solid base for the next gross domestic product (GDP) growth calculation in the quarterly national accounts due on September 5.

"Retail sales now look set for a relatively good calendar year, a welcome reprieve after four years of 'recession like' demand conditions," Westpac senior economist Matthew Hassan said.

Hassan expects some pullback in retail sales growth later in the year - once the $1.9 billion of government payments and $1.2 billion of interest rate savings are spent.

But even if Treasurer Swan has fanned interest in Springsteen, music sales would comprise only a small part of the $21 billion-plus Australians spend at the shops every month.

According to the ABS, consumers spent $446 million in 2009 on various music formats, such as CDs, vinyl records, DVDs and digital downloads.

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