Since the Reserve Bank of Australia (RBA) is keen for one of the non-mining sectors to take over leadership of Australia’s economy, we’ve been closely monitoring the country’s retail sector.

And retail’s performance has taken on new significance as economists, including RBA Governor Glenn Stevens, become increasingly concerned about a possible housing bubble. With interest rates at historic lows, it makes sense that rate-sensitive sectors such as real estate should be booming.

At the same time, while Mr. Stevens has recently lamented the lack of “animal spirits” among entrepreneurs and other risk-takers who help spur growth, he is cognizant of not fueling a further spike in housing prices by lowering rates even further.

As he noted in a recent address before the Committee for Economic Development of Australia (CEDA), “[A build-up of risk in the financial sector] could leave the economy exposed to nasty shocks in the future. The more prudent approach is to try to avoid, so far as we can, that particular boom-bust cycle.”

“It is stating the obvious that at present,” Mr. Stevens continued, “while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that.”

Translation: The central bank is holding firm on its benchmark cash rate, which is currently at an all-time low of 2.5 percent.

For now, that leaves the retail space as the great non-mining sector hope. As Reuters notes, the AUD270 billion retail sector accounts for 17 percent of Australia’s economy and is the country’s second-biggest employer, providing 10 percent of all jobs.

And the sector has shown unusual resilience amid a period of rising unemployment, particularly during the latter half of 2013 and early 2014.

Indeed, from October through January, retail sales not only rose, their pace of growth accelerated with each passing month, finally peaking with seasonally adjusted month-over-month growth of 1.2 percent in January. Thereafter, however, growth was essentially flat for three months, before the outright decline in May.

Falling consumer confidence amid a difficult job market and a contentious federal budget are considered among the possible culprits for this sudden weakness after such a strong run.

But the June numbers showed that Australia’s consumer sentiment perhaps had greater resilience than expected–or at least that it doesn’t always flow through to spending.

And now the Australian Bureau of Statistics’ (ABS) release of the July numbers shows that retail sales have increased for the second consecutive month, even if the pace was slightly lower than in June.

The ABS reported that Australian retail turnover rose 0.4 percent in July, to AUD23.3 billion, equaling the consensus forecast among economists, according to data aggregated by Bloomberg.

Over the trailing year, retail sales have averaged growth of 0.5 percent per month, compared to 0.3 percent per month over the trailing three-year period. So the sector does have considerable near-term momentum.

Indeed, economists with Westpac said July’s result increases trailing-year growth in retail sales to 5.9 percent from 5.6 percent.

According to the ABS, discretionary spending was a significant factor in this result, with the largest contributor to the rise coming from the cafes, restaurants and takeaway food services category, which rose 1.4 percent, accounting for 14 percent of total retail sales.

And sales at department stores rose 1.9 percent after two consecutive months of declines.

Food retailing, which accounts for 41 percent of retail trade, increased 0.5 percent, while clothing, footwear and personal accessory retailing was up 0.1 percent.

Interestingly, despite the frothy real estate market, household goods retailing declined by 0.2 percent, though this was on the back of strong growth in June.

Most economists believe July retail sales, along with improving consumer and business confidence, augur well for third-quarter growth.