While the rest of the world continues to suffer at the hands of GFC two, the Australian economy is in pretty good shape.
According to the latest retail figures, retail sales were solid in September and Q3 as a whole.
Data from the Australian Bureau of Statistics found retail volumes rose by 0.6 per cent after a rise of 0.2 per cent in Q2.
"Today's retail numbers re-affirm that the Australian economy is still in pretty good shape," HSBC chief economist Paul Bloxham said.
"Growth in retail sales has been rising through this year, despite the fact that consumer sentiment has been weak. Keep in mind that retail sales are only around one-third of household consumption spending in Australia, and the rest of consumption growth has been outpacing retail recently.
"This is because households have been spending more on services like health, education and transport, as well as making more on-line purchases. The result is that overall consumption growth had been running at about its average pace up to Q2.
"Today's report suggests there may be some shift back to retailers. The weakest areas of retail sales - clothing and footwear and department stores - are also the areas that seem most susceptible to strong competition from on-line sales."
Mr Bloxham said the results also strongly indicate that Australia has a two speed economy.
Over the year, retail sales volumes have been strongest in the mining states and weaker elsewhere. In the main mining states, the volume of sales has risen by 2.8 per cent year on year, while they have fallen by 1 per cent elsewhere.
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