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Sydney, Jan. 6 (Bloomberg) -- Australian retail sales rose more than twice as fast as economists expected in November as department store sales surged, fueled by increasing employment and rising consumer confidence.
Retail sales rose 1.7 percent from October to A$14.63 billion ($8.3 billion), the Australian Bureau of Statistics said. Sales in October were unchanged from September. Spending was expected to rise 0.7 percent, according to the median forecast of 15 economists surveyed by Bloomberg News.
The Australian dollar rose to a six-month high on expectations rising retail sales will fuel an economy that has been battling the worst drought in a century and weaker global growth. Retailers say the sales increase probably continued over key Christmas holiday period, which accounts for as much as one-fifth of annual sales.
``Post-Christmas sales have been good,'' said Vince Randazzo, general manager retail at David Jones Ltd., owner of Australia's second-biggest department store chain. ``Our customers have responded well to clearance sales -- they've got a good eye for a bargain.''
A 6.3 percent increase in department store sales and a 1.7 percent gain in clothing sales led the biggest increase in retail spending since February 2001.
The Australian dollar rose to 56.96 U.S. cents at 1 p.m., up from 56.73 cents before the report and 56.34 on Friday. Earlier, it reached 57.02, the highest since July 11, 2002.
Bonds Fall
The yield on the 6.5 percent bond maturing in May 2013 rose 2 basis points to 5.39 percent at 12:05 p.m. Sydney time. Earlier, it rose as high as 5.45 percent, a three-week high. A basis point is 0.01 percentage point.
The S&P/ASX 200 index of consumer staple stocks rose 0.3 percent to 4140.7.
The retail sales rise ``underscores the resilience of the non- farm economy into the end of 2002,'' said Scott Haslem, senior economist at UBS Warburg Australia Ltd. Haslem said the strength in retail spending suggests economic growth in the fourth quarter may be higher than the 0.8 percent rise UBS is forecasting.
Helping underpin spending, Australia's economy added 60,400 jobs in November, more than three times the number expected by economists. Retailers such as Coles Myer Ltd. and Woolworths Ltd. hired more workers ahead of a Christmas sales rush.
The unemployment rate in November was 6.1 percent, close to a two-year low. Consumer confidence rose in both November and December, according to a Westpac Banking Corp. and Melbourne Institute index. The economy accelerated in the third quarter, to expand 0.9 percent, driven by consumer spending and a housing boom.
Christmas Rush
Following a slow start to the holiday shopping period, Australian retailers, including Coles Myer and Woolworths, are forecast to reach their target of a 4 percent increase in retail sales in December from a year earlier, after last-minute Christmas spending boosted sales, according to the Australian Retailers' Association.
The strength in retail sales, even as a drought and a global slowdown damp exports, suggests the Reserve Bank of Australia won't need to cut interest rates, as the U.S. Federal Reserve has, economists say.
``We're holding to the view that interest rates are on hold for the next six months,'' said Anthony Thompson, senior economist at HSBC Bank Australia Ltd.
``Domestic demand could justify an increase earlier, but the Reserve Bank will wait to judge the global outlook and the end of the drought.''
The Australian central bank raised interest rates in May and June and has kept the benchmark cash rate target at 4.75 percent since.