July 3 (Bloomberg) -- Australian retail sales rose less than economists forecast in May as consumers cut spending on dining out and household goods.
Sales gained 0.1 percent to A$21.8 billion ($20 billion) from a month earlier, when they fell a revised 0.1 percent from an earlier reported 0.2 percent increase, the Bureau of Statistics said in Sydney today. The result compares with the median forecast in a Bloomberg News survey of 23 economists for a 0.3 percent advance.
Reserve Bank of Australia Governor Glenn Stevens and his board cut borrowing costs by 2 percentage points between November 2011 and May to 2.75 percent, joining global counterparts in embracing record-low rates. The RBA is trying to rebalance the economy away from mining regions in the north and west as investment wanes, and stimulate growth in manufacturing, residential construction and retail in the south and east.
“Retail trade is struggling to get its mojo back,” Katrina Ell, an economist at Moody’s Analytics in Sydney, said before the report. “Households are worried about the economy and job prospects so are keeping a lid on spending.”
Spending at restaurants and cafes declined 0.6 percent, and consumers spent 0.3 percent less on household goods, today’s report showed. They spent 0.8 percent more at department stores, it showed.
The local dollar traded at 91.72 U.S. cents at 11:36 a.m. in Sydney from 91.76 cents before the release.
“The easing in monetary policy over the past 18 months has supported interest-sensitive spending and asset values and further effects can be expected over time,” Stevens said in a statement yesterday after leaving rates unchanged. “The pace of borrowing has remained relatively subdued, though recently there are signs of increased demand for finance by households.”
Australia has posted the developed world’s quickest growth rates as demand from China fueled a once-in-a-century mining-investment boom. That’s souring as China’s outlook deteriorates and the Aussie dollar’s strength forces companies including Ford Motor Co. to cut workers and close plants.
The currency held above $1 from mid-June last year to May 10, the longest stretch above parity with the U.S. dollar since the Aussie was freely floated in 1983.
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