Sydney shoppers have shrugged off the Reserve Bank's first interest hikes to spend at their fastest rate in 8 years.
Retail sales data for October, the month the rate hikes began, show spending in NSW up 1.2 per cent in the month and 8.8 per cent over the year, the fastest growth rate in the nation.
Spending on cafés and restaurants climbed an extraordinary 40 per cent and spending on takeaway food 21 per cent.
"People are eating out again," said CommSec economist Savanth Sebastian.
"The sustained improvement in consumer sentiment, rising wealth and the pick up in the labour
market has allowed us to lift our spending on luxuries and treats, rather than limiting ourselves to necessities."
ANZ senior economist Julie Toth said sales in cafes, restaurants and take-away outlets tended to reflect consumer confidence more immediately than sales in other outlets.
"It shows consumers were not feeling too dented or threatened by the first cash rate rise," she said.
JP Morgan economist Helen Kevans said much would depend on how consumers reacted the the series of three interest rate rises.
"This is not only the first time the Reserve Bank has hiked the cash rate three times in three straight months, it is also the first time since 2003 it has hiked the cash rate in December, ahead of the key Christmas spending period," she said.
Myer chief executive Bernie Brookes said Christmas sales were tracking in line with Myer's forecast 2008-10 sales growth of 3 per cent with early sales of Christmas decorations and hampers in November now translating into robust sales for cosmetics and especially gift vouchers.
Mr Brookes said sales of gift cards were up by between and 30 and 40 per cent on the previous year.
He said Myer had not seen any effect of the Reserve Bank's interest rate rises to date but that if rates rose by between a further one to three percentage points Myer could see an effect.
Seperately released industry figures show car sales up in November with 85,833 new cars sold with businesses rushing to buy new vehicles before the special budget tax break expires in December.
Passenger car sales were up 9.4 per cent on a year ago to 47,059 while sales of four wheel drives were up 44 per cent to 18,360 and sales of light commercial vehicles up 38.9 per cent to 18,094.
Pick-up trucks accounted for 18 per cent of all motor vehicle sales in November.
Published in today's SMH
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