By Jacob Greber
Dec. 3 (Bloomberg) -- Australia's retail sales probably rose for a fifth month as the lowest unemployment rate in three decades spurred spending, adding to inflation pressures that have already prompted the central bank to raise interest rates twice this year.
Sales advanced 0.6 percent in October from September, when they climbed 0.8 percent, according to the median estimate of 24 economists surveyed by Bloomberg News. The Bureau of Statistics releases the report at 11:30 a.m. in Sydney tomorrow.
Income tax cuts and rising wages, driven by a shortage of skilled labor as miners such as Rio Tinto Group expand to meet demand, have boosted household spending on cars, food and electronics. Higher consumption may prompt the central bank to raise interest rates again early next year to cap price gains.
``Spending will continue to be well supported by robust jobs growth, rising wealth and tax cuts,'' Westpac Banking Corp. economist Bill Evans said in Sydney.
Reserve Bank of Australia policy makers led by Governor Glenn Stevens hold their final meeting for 2007 in Sydney tomorrow and will keep the benchmark rate at 6.75 percent, according to all 27 economists surveyed by Bloomberg News. The bank will announce its decision a day later at 9:30 a.m.
Nineteen economists say the bank will raise the rate by a quarter point to 7 percent in the first three months of 2008 to curb inflation.
Australia marked its longest run of jobs growth in more than 12 years in October, worsening a labor shortage that prompted the central bank to raise borrowing costs in November and August. The unemployment rate is 4.3 percent.
The Reserve Bank raised its inflation forecast last month and said the economy's expansion shows ``considerable momentum,'' reinforcing speculation Stevens will increase interest rates by March.
Core inflation will accelerate to 3.25 percent by December and remain there until June, more than a previous estimate of 3 percent and exceeding its target, the central bank said in a quarterly statement in Sydney on Nov. 12.
The bank's August rate increase probably triggered a fall in home-building approvals in October, according to a separate survey of economists by Bloomberg News. The government will publish the report at 11:30 a.m. tomorrow in Sydney.
The nation's economic growth probably accelerated to 1 percent in the third quarter from the previous three months, when it expanded 0.9 percent, another Bloomberg News survey of economists shows. The government will publish the gross domestic product report at 11:30 a.m. on Dec. 5.
Still, rising oil and fuel prices may prompt households to reduce spending on other goods in coming months, economists say. The price of crude oil has surged 49 percent this year.
The following table shows economists' estimates of the monthly change in retail sales in October from the previous month:
High Forecast 0.9%
Low Forecast 0.3%
No. of forecasts 24
ABN Amro 0.7%
AMP Capital 0.3%
Ausbil Dexia 0.9%
BT Financial 0.4%
ANZ Bank 0.6%
Bank of America 0.5%
Commonwealth Bank 0.8%
Deutsche Bank 0.6%
Goldman Sachs JBWere 0.4%
Grange Securities 0.6%
JPMorgan Chase 0.3%
Macquarie Bank 0.6%
Merrill Lynch 0.6%
National Australia Bank 0.5%
RBC Capital Markets 0.4%
St. George Bank 0.4%
TD Securities 0.4%
Thomson IFR 0.7%
UBS Australia 0.6%
Westpac Bank 0.5%