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Sales climbed 0.7 percent from April, when they fell a revised 0.1 percent, the Bureau of Statistics said in Sydney today. The increase beat the median estimate of 24 economists surveyed by Bloomberg News for a 0.1 percent gain, according to the report.

Spending has increased on food, recreational goods, cosmetics and jewelry, suggesting Australian households are weathering 12- year high interest rates and record fuel prices.

And in further good news for electronics retailers, spending at recreational goods retailers gained 2.2 percent in May, while food sales increased 1 percent, the report showed.