Pre-Christmas spending marked the biggest bargain hunt in two years

Defying the pressure from surging living costs and high interest rates, shoppers splurged on toys, appliances, clothes, electronics and cosmetics in November, including an extra 7.5 per cent on household goods and a 4.2 per cent increase in department store purchases. Food sales were up just 0.4 per cent.

The value of retail turnover rose 2 per cent to reach $36.5 billion, the biggest monthly jump since November 2021, according to the Australian Bureau of Statistics.

Spending in the ACT rose by 2.1 per cent.

ABS head of business statistics Robert Ewing said the surge came after sales fell in October, suggesting consumers had held back on their discretionary spending to take advantage of retailer discounting.

"Black Friday sales were again a big hit this year, with retailers starting promotional periods earlier and running them for longer compared to previous years," Mr Ewing said.

The financial strain on households may have helped fuel demand for cut-price products, he said.

"Retailers told us that the success of Black Friday sales was boosted by consumers seeking out discounts in response to cost-of-living pressures," the statistician said.

Australian Retailers Association chief executive Paul Zahra said the growing popularity of Black Friday sales gave retailers hurt by subdued spending in the preceding months "some much-needed reprieve".

ANZ senior economist Adelaide Timbrell said the "very strong" growth in November retail sales did not signal a sustained rebound in household spending.

Ms Timbrell said the increase was driven by stretched households rushing to take advantage of discounts rather than a step up in consumption.

"Black Friday sales tend to cannibalise spending in surrounding months and we expect December retail sales to fall, as they have in seasonally adjusted terms very years since 2019," she said.

Commonwealth Bank head of Australian economics, Gareth Aird, said the November data needed to "be taken with a pinch of salt" in trying to assess the strength of consumer demand.

Mr Aird said the shift in spending patterns caused in recent years by Black Friday sales complicated the task facing the ABS and economists and December sales figures will be needed to clarify whether or not the November surge signalled a sustained lift in consumption.

Ms Timbrell said the November spending splurge was "unlikely" to convince the Reserve Bank of Australia monetary policy board to hike interest rates when it meets next month.

The RBA has been seeking to bring inflation down by raising interest rates to reduce demand in the economy.

Growth in the consumer price index has slowed in the past year as consumption has fallen back, encouraging the central bank to hold the official cash rate steady at 4.35 per cent at its December 6 meeting.

Markets and several economists think interest rates have peaked and are set to remain where they are for several months before beginning to ease around mid-year. Investors expect at least one rate cut by the end of the year.

The possibility that the cycle of rate hikes has ended has boosted the mood of households, according to the ANZ-Roy Morgan consumer confidence index.

The index rose 3 points this month, its third biggest January jump in 15 years.

It is now at its highest mark in a year, mostly because of a sharp improvement in the confidence of mortgage holders and home owners, who have been buoyed by rising house prices and more stable interest rates, Ms Timbrell said.

Renters, who continue to face steeply rising housing costs, are more pessimistic, she said.

The results came as the ABS reported a 1.6 per cent lift in building approvals in November to 14,529 dwellings.

Despite the improvement, the number of homes approved was down 4.6 per cent from a year earlier, indicating that the nation's housing shortfall was deepening late last year.