Retail sales in Australia surprised on the upside, rising 0.7 percent on the month in May versus the median forecast of a 0.2 percent gain, as consumers took advantage of discount sales during large events including Mother's Day. This follows the weaker-than-expected flat reading in April, when consumers trimmed spending on groceries and dining out amid high prices, following increases of 0.4 percent in March, 0.2 percent in February and 1.9 percent n January.

The year-over-year increase in retail sales steadied at 4.2 percent after slowing to 4.2 percent in April from 5.4 percent in March and 6.4 percent in February.

On the month-over-month rise in retail sales, Ben Dorber, the head of retail statistics at the Australian Bureau of Statistics said in a statement,"This latest rise reflected some resilience in spending with consumers taking advantage of larger than usual promotional activity and sales events for May."

The category called"other retailing" recorded the largest rise (up 2.2 percent), led by online-only retailers, florists, and pharmaceutical and cosmetics retailers.

Household goods retailing had a modest 0.6 percent rise following three straight monthly falls. Clothing, footwear, and personal accessory retailing (down 0.6 percent) and department stores (down 0.5 percent) were the only retail categories to fall in May. This follows a rise in April when sales were boosted by increased spending on clothing items due to cooler and wetter than average weather.

Sales in cafes, restaurants and takeaway food services rose 1.4 percent on the month in May to a record level following a small fall in April while food retailing, up 0.3 percent, posted a monthly rise for 16 of the past 18 months. Suppliers continued to pass on their higher costs through markups.

Retail turnover rose across most of the states and territories. The Northern Territory (up 1.6 percent) recorded the largest rise and is now at its highest level. Tasmania recorded the only fall in turnover, down 0.1 percent.

Retail sales, which were unchanged and weaker than expected in April, are expected to edge only 0.1 percent higher in May.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The Retail Business Survey covers all employing retail trade businesses who predominantly sell to households.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the overall picture, but also the trends among different types of retailers. Especially strong apparel or electronics sales can indicate strength in those industries, for example. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.