CANBERRA, AAP – Australian consumers showed some caution in their spending habits during the Omicron COVID-19 outbreak, but retail sales still posted the second-highest level on record at $32.5 billion in January.

Retail spending grew by a stronger-than-expected 1.8 per cent in January, partially recovering from 4.4 per cent drop in December.

Most categories rose in the month, with department store sales surging 4.9 per cent and food purchases rising 2.2 per cent, but cafes, restaurants and takeaway food services declined 0.8 per cent.

“The impact on activity from Omicron fears was relatively mild and peaked in the first week of January with mobility picking up strongly thereafter,” National Australia Bank director of market economics Tapas Strickland said.

KPMG senior economist Sarah Hunter said the easing of restrictions in many states through February and into March has enabled a further increase in household spending, with steady rises reported in bank card spending.

This is “despite consumer confidence being weighed down by rising fuel costs and the ongoing geopolitical situation in Europe”, she said.

Australian Institute of Petroleum figures showed the national average for petrol prices struck another record high in the past week, rising a further 1.5 cents to 180.6 cents per litre, with prices above 190 cents in the Northern Territory and Tasmania.

This comes after a week when global crude oil prices topped $US100 a barrel on Russia’s invasion of the Ukraine, suggesting Australian petrol prices have further to rise.

The Australian Bureau of Statistics released its business indicators report for the December quarter, elements of which will feed into Wednesday’s national accounts.

Company gross operating profits rose two per cent in the quarter, and in line with economists’ expectations.

But business inventories – stock on shelves and warehouses – rose by 1.1 per cent when economists had expected a flat result, and is expected to contribute one percentage point to economic growth in the quarter.

As such, economists now see some upside risk to the expected three per cent rise in economic growth for the December quarter – figures that are included in the national accounts.

The strong result comes after the Delta lockdown-related contraction of 1.9 per cent in the September quarter.

Economists will finalise their forecasts after Tuesday release of the balance of payments and government finance figures for the quarter.

Shadow treasurer Jim Chalmers expects the national accounts will show a healthy economic recovery.

But he told an Australian Industry Group function the uncertainty around the war in Ukraine will push up energy and food prices and feed into some serious market volatility and investor caution, with consequences for the Asia-Pacific region and Australia.

Dr Chalmers says the emergence of inflation poses difficult judgments for the Reserve Bank of Australia on interest rates, “which will sting when they inevitably come off their low base”.

The RBA will hold its monthly board meeting on Tuesday, but economists expect it is still some months away from lifting the cash rate from a record low 0.1 per cent given last week’s wage growth figures.

They showed annual wage growth of 2.3 per cent when the RBA wants to see three per cent-plus before raising the cash rate.

The RBA’s monthly credit figures also released on Monday showed demand for housing loans rose by a further 0.7 per cent in January to an annual rate of 7.7 per cent, the highest level since August 2010.

Total credit – including housing, personal and business loans – rose 0.6 per cent for an annual rate of 7.6 per cent, the fastest rate since late 2008.