New data published on Thursday suggested that consumer confidence is on the decline as shoppers were confined to simply roaming through the shops seemingly wary of spending due to rising cash rates.

Prospective home buyers appeared to be shunning the housing market too in spite of the recovery being made by the Australian labour market as fresh figures from the Australian Bureau of Statistics (ABS) showed that retail spending merely rose by a seasonally adjusted 0.2 percent in May, en route to the $20.16 billion consumer spending seen by that month.

Economists said that the fresh spending data was in line with economic projections as ANZ senior economist Amber Rabinov said that the retails sales pointed to glaring evidence that "Australia economic momentum has taken a breather as the economy adjusts to tighter monetary policy and the removal of fiscal stimulus."

Sales figures on household goods dipped by 1.4 percent in May as shoppers gave indications that clothing and footwear are more important as sales of that department increased by 1.7 percent while overall growth in department stores retailing jumped as sales of that department increased by 1.7 percent while overall growth in department stores retailing jumped by 1.0 percent with the food retailing rising by 0.2 percent.

Among the states and territories, only NSW and Victoria posted retail growth in the same month with improvements of 0.9 percent and 0.2 percent respectively as the other regions all reported slides in consumer spending with South Australia leading the pack at 0.9 percent fall.

The ABS figures also showed that building approvals took a nosedive for two consecutive months with the slid by 6.6 percent in May to 13,412 units followed by the sector's 11.4 percent in the previous month.

Economists attributed the decline to a slow down in home loan demands as the rising interest rates started to bite and the government withheld its generous first home owners' grant as the flat economic forecast made earlier by experts started to unravel.

On the other hand, private housing approvals went up by 1.7 percent in the same month to 8835 units but the traditionally volatile 'other dwellings', consisting of flats and townhouses, suffered a substantial drawback of 18.8 percent to 3643 units.

Analysts are in agreement that the Reserve Bank of Australia (RBA) would maintain the current rate at 4.5 percent when its board convenes anew this month as RBC Capital Markets senior economist Su-Lin Ong observed that despite the alarming high inflation scenario, "the deteriorating global outlook and jittery state of financial markets," could force the RBA to turn into a protracted pause on the cash rate.