They expect underlying consumer fundamentals to remain challenging, with weak wages growth and high underemployment likely to continue to drag on consumer spending in coming months.

Data from the Australian Bureau of Statistics on Thursday showed that seasonally adjusted retail spending rose 1.0 per cent to $25.89 billion in April, surpassing market expectations of a modest 0.3 per cent rise.

The rebound follows a weak trend over the previous two months, with revised ABS data showing retail sales fell 0.2 per cent in March and were flat in February.

National Australia Bank economist Ivan Coulhoun pointed to two factors driving the result.

First, a substantial 2.4 per cent bounce-back in retail sales in Queensland, which had been significantly impacted in March by Cyclone Debbie.

Secondly, the significant change in seasonality this year, with the Easter holiday period falling in April, compared to March in 2016.

April’s spending gains were helped by stronger business at department stores and a lift in sales by cafes and restaurants.

Cafes, restaurants and fast food sales were up 1.1 per cent, food retailing rose 1.2 per cent, while department stores’ sales lifted 2.5 per cent.

– AAP