* September retail sales up 0.2 pct vs 0.3 pct consensus
* Q3 chain volume sales up 0.2 pct vs 0.4 pct consensus
* Q3 data suggests household consumption weighed on GDP
By Swati Pandey
SYDNEY, Nov 2 (Reuters) - Australian retailers faced another month of sluggish sales growth as consumers, nervous about stagnant wages and tumbling house prices, curbed spending in a sign third-quarter economic growth could disappoint.
Friday's data from the Australian Bureau of Statistics (ABS) showed retail sales rose a meagre 0.2 percent in September, missing expectations for an already slow 0.3 percent rise in a Reuters poll. This follows a gain of 0.3 percent in August and a flat outcome in July.
In chain volume terms, sales grew 0.2 percent for the whole third quarter compared with a robust 1.2 percent in the prior three-month period.
The Australian dollar AUD=D4 dipped about 20 pips to $0.7205 after the disappointing numbers capped a week of underwhelming economic data on building approvals, inflation and house prices.
Friday's data implies a risk private consumption didn't add much to overall economic growth in the September quarter. It also casts a shadow on the Reserve Bank of Australia's (RBA) forecasts for the A$1.8 trillion economy to grow at an annual pace of over 3 percent over the next two years.
"The figures are a bit on the softer side and it concludes a quarter which was fairly weak as well," said Ben Jarman, Sydney-based senior economist at JPMorgan (NYSE:JPM).
"The (Q3) volume number...does suggest that the next GDP reading is off to a pretty soft start as far as the household consumption component goes."
The RBA fears ballooning debt in Australia's red-hot property sector will limit consumers' ability to spend elsewhere in the economy, one reason it has held rates at an all-time low 1.50 percent since August 2016.
Australia's retail sector showed some signs of life earlier in the year, but faces several headwinds amid a downturn in the country's once-booming property market, sluggish wages and stratospheric household debt.
Figures from Thursday showed home prices in Sydney, Australia's biggest city by population, plunged the most since 1990 in October, down 7.4 percent annually. ABS data showed falls in clothing, footwear and personal accessory retailing while household goods, which includes furniture, floor coverings and building supplies were flat as were department stores.
Reflecting the broader softness, Australian online retailer Kogan.com KGN.AX released a dismal September-quarter update earlier this week while budget jewellery chain Lovisa LOV.AX also projected a "challenging" outlook for the period ahead, led by "weakness in the Australian market." retail stocks such as JB Hi-Fi JBH.AX , Harvey Norman HVN.AX , Super Retail Group SUL.AX and Myer MYR.AX have lagged the broader market since the beginning of this year.
They are down 8-27 percent so far this year compared with a near 4 percent fall in the benchmark S&P/ASX 200 index .AXJO .