Retail sales have increased by a higher than expected amount during August according to latest figures from the Australian Bureau of Statistics.
The figures come after an unexpected rise in July brought spending to $20.6 billion.
According to the figures retail sales rose by a seasonally adjusted 0.6% in August to a total of $20.81 billion.
The result comes a day after the Reserve Bank hinted that it may be prepared to lower interest rates if economic conditions deteriorate.
The services industry expanded during September for a second consecutive month according to latest figures from the Australian Industry Group-Commonwealth Bank Performance of Services index.
The index fell by 1.8 points to 50.3, remaining above the 50-point threshold that separates expansion from contraction.
Commonwealth Bank senior economist James McIntyre said in a statement that expansion shows some elements of the economy are able to withstand global turmoil.
“The economy is caught between the sentiment and financial market impacts stemming from Europe’s sovereign debt crisis and the longer-run positive impacts of Asia’s emergence and development,” McIntyre said.
“Consumer-related sectors – such as retail and personal services – weakened as shell-shocked consumers exercised caution.
“Meanwhile, conditions in business-related sectors – such as property and business services, and transport and storage – were stronger as the mining boom benefits trickle through the economy.”
The local share market opened higher this morning after an unexpectedly strong overnight lead from the US.
The benchmark S&P/ASX200 index was up by 45 points or 1.2% to 3917.6 at 12.00 AEST while the Australian dollar stayed at $US0.95c.
AMP shares rose 2.13% to $3.83, Commonwealth Bank shares rose 0.87% to $43.99, Westpac shares rose 1.88% to $19.70 and NAB lifted 1.68% to $21.82.
In the US the Dow Jones Industrial Average rose 153.4 points or 1.4% to 10,808.7.
Moody’s has downgraded Italy’s credit rating by three rankings to A2 with a negative outlook, the organisation announced yesterday.
The group said the decision was made due to long-term funding risks for European countries experiencing a high level of debt.
“The negative outlook reflects ongoing economic and financial risks in Italy and in the euro area,” Moody’s said in a statement.
“If such risks were to materialise and the long-term availability of external sources of liquidity support were to remain uncertain the country’s rating could transition to substantially lower rating levels.”
Transfield Services has announced an on-market share buyback of 10% of its stock, the company said in a statement.
“The board considers that the current market price of Transfield Services shares does not fully reflect the company’s fundamental value and that the share buy-back is in the best interests of all shareholders,” it said this morning.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
