Australia’s Retail Sales Increase Less Than Economists ForecastMichael Heath
Australian retail sales rose less than expected in July as consumers reduced spending at department stores in an economy grappling with a weaker outlook.
Sales climbed 0.1 percent to A$21.8 billion ($19.6 billion) from a month earlier, when they were little changed, the Bureau of Statistics said in Sydney today. The result compares with the median forecast in a Bloomberg News survey of 27 economists for a 0.4 percent gain.
Traders are pricing in almost no chance Reserve Bank of Australia Governor Glenn Stevens and his board will cut interest rates today after lowering borrowing costs by 2.25 percentage points between November 2011 and August to boost a flagging economy. Prime Minister Kevin Rudd faces an election this week after a campaign centered around managing Australia through the downturn of a mining-investment boom.
“Consumers are spending, but they remain selective on where this spending is occurring,” Michael Blythe, chief economist in Sydney at Commonwealth Bank of Australia, the nation’s largest lender, said before the report. “While consumer unemployment fears remain high, soft growth in the retail sector is likely to continue.”
Spending on household goods rose 1.8 percent, and consumers spent 1.4 percent more on clothing, footwear and accessories, today’s report showed. They spent 7.9 percent less at department stores, it showed.
Coca-Cola Amatil Ltd., Australia’s largest listed drinks company, said last month first-half profit declined and full-year earnings would miss estimates.
“Consumer sentiment had declined since earlier in the year to be close to average levels,” the RBA said in minutes of its August meeting, when it cut rates by a quarter point to 2.5 percent “Overall, the softer run of recent indicators of consumption was consistent with the somewhat subdued conditions in the labor market.”
Australian employers unexpectedly cut payrolls in July by 10,200 and unemployment held at an almost four-year high of 5.7 percent, government data showed Aug. 8.