Confidence fails to translate into sales

Rising consumer confidence failed to translate into increased spending at the shops in September, the month before the central bank started raising interest rates.

Retail sales fell by a seasonally adjusted 0.2 per cent in September to $19.7 billion, Australian Bureau of Statistics data released on Wednesday show.

The result defied the median economist forecast for a 0.5 per cent increase.

During the three months to September retail trade fell 0.4 per cent, which is likely to drag on third quarter gross domestic product. Those data are due in December.

Other data released on Wednesday showed building approvals rose 2.7 per cent in September to 12,476 units, and was stronger than median forecast for a 2.0 per cent increase.

September was the last month first time homebuyers would have benefited from the full whack of the government's more generous housing grant.

It was pared back on October 1.