Australian Bureau of Statistics figures issued this morning show a 0.6 per cent drop in retail turnover in ACT shops in October. It dropped to a seasonally adjusted $367.1 million, down from $369.3 million in September.

Only Victoria's 0.9 per cent fall was larger. Queensland (-0.2 per cent) was the only other jurisdiction to record a decrease, although South Australia's result was unchanged.

Nationally, retail trade rose 0.3 per cent in October to a seasonally adjusted $19.751 billion, from $19.699 billion in September.

The increase, which was in line with market expectations, comes despite the Reserve Bank unexpectedly raising rates in early October. It has raised rates twice more since, including earlier this week, taking the official cash rate to 3.75 per cent.

JP Morgan economist Helen Kevans said those three rate hikes would make the last few months of this year challenging for retailers.

"This is not only the first time the RBA has hiked the cash rate three times in three straight months, but it is also the first time the central bank has hiked the cash rate in December, ahead of the key Christmas spending period, since 2003,'' she said.

"Interestingly, the most recent Westpac-Melbourne Institute consumer sentiment survey asked about people's spending intentions this Christmas. About half of those surveyed said they would spend about the same this year as last year, but 35 per cent said they would cut back. We suspect that this 35 per cent will have risen in the wake of the RBA's decision to hike the cash rate a further 25 basis points this week.''

ANZ economist Julie Toth said the data supported the view that the Australian economy was firmly in the early stages of recovery.

"With the RBA already having made its decision to raise the cash rate in December, today's data hold no strong significance for immediate monetary policy. The RBA does not meet again until February, by which time data will be available for the all-important Christmas holiday trading period,'' she said.

Staff reporters