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UPDATE 1-Record sales for Australian retailers raise quick economic recovery hopes

(Adds economist comment, banks card spending data)

SYDNEY, June 19 (Reuters) - Australian retail sales surged a record 16.3% in May as a wide scale easing in coronavirus lockdowns allowed entire sectors to re-open, enabling a recovery from an historic plunge in April.

The stunningly strong bounce suggests consumer spending will be not nearly as weak as first feared in the June quarter, offering hope the economy can recover quickly from its first recession in three decades.

The Australian Bureau of Statistics on Friday reported its preliminary estimate of retail sales jumped 16.3% seasonally adjusted in May, from April when it tumbled 17.7%. Sales were also up 5.3% on May last year at A$28.83 billion ($19.77 billion).

There were large rises for household goods, clothing, footwear and personal accessory retailing and cafes, restaurants and takeaway food services.

Sales have swung wildly in recent months, first jumping in March on panic buying ahead of the lockdowns, before collapsing in April when much of the economy closed down.

“Volatility of this nature is unprecedented in the 38-year history of the retail trade survey,” said Callam Pickering, economist at global job site Indeed.

“Consequently, it is difficult to interpret conditions across the retail sector,” he added.

“The combination of higher unemployment and low wage growth has never been positive for the retail sector...it is clear that the retail sector will face an uphill battle throughout the remainder of 2020.”

For now, credit and debit card spending data from Australia’s biggest banks suggest the momentum has rolled into June.

Last week, Commonwealth Bank’s credit and debit card data indicated a lift in services expenditure while showing a pick-up in in-store spending.

Separately, ANZ Banking Group said it saw spending rise 6.1% in the week to June 12 from a year ago.

In all, the increased use of cards over cash due to the pandemic appears to have inflated the spending growth captured by banks.

$1 = 1.4584 Australian dollars Reporting by Wayne Cole and Swati Pandey; Editing by Shri Navaratnam

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