Low wage growth means less spending: PM

Low wage growth means Australians aren't reaching into their pockets at the shops, Malcolm Turnbull believes.

Retail spending in August declined for a second month in a row, with the 0.6 per cent drop in trade the worst monthly performance in more than four years.

It included a 1.3 per cent tumble in cafe, restaurants and takeaway food spending.

"While we're seeing strong growth in employment, we're yet to see stronger growth in wages so people feel as though they're not getting ahead," the prime minister told Neil Mitchell on 3AW radio on Friday.

"We need to see more stronger growth in wages."

When there was stronger economic growth, the labour market became tighter and a wage catch-up followed.

Mr Turnbull also put lower retail spending down to higher electricity prices.