All of the data on Tuesday pointed in the direction of a stronger Australian economy.

The headline act was retail trade.

The value of spending rose by 0.4 per cent between July and August, after seasonal adjustment.

It was the biggest monthly rise since February, although not too much should be made of it - the rise only brought the value of retail trade back to where it was in February, with growth from a year ago coming in at a paltry 2.3 per cent.

But it was a still rise.

Also on Tuesday, the Housing Industry Association said sales of new homes rose by 3.4 per cent in August, just about reversing July's fall from the 19-month high achieved in June.

And the conditions supporting sales are still with us, according to housing price figures from RP Data.

The RP Data - Rismark Hedonic Home Value Index for Australian capital cities rose by 1.6 per cent in September and by 5.5 per cent through the year to September.

Things seem to be picking up, with two thirds of that annual rise in home prices racked up in just the latest three months.

It's tough for first home buyers, but rising prices generally boost economic activity.

It's not just housing and retailing either.

Earlier on Tuesday, the Australian Industry Group's index of activity in the manufacturing sector rose above the 50 level marking the line between expansion and contraction in the sector.

It was the first result over 50 for just over two years.

Any great excitement about this result would be an overreaction - the reading of 51.7 was not especially strong, and the recent trend in this volatile series suggest we have quite a few sub-50 numbers to get through in coming months.

Even so, it was in line with the theme of gradual strengthening evident in the retail trade, housing price and home sales data.

 

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