Australian shoppers stay at home in January, A$ falls
By Swati Pandey
SYDNEY, March 7 (Reuters) - Australian retailers suffered
another bleak month in January, pointing to a tepid start for
the new year after economic momentum slowed last quarter.
Retail sales rose 0.1 percent in January, figures from the
Australian Bureau of Statistics (ABS) showed on Thursday,
picking up from a shock 0.4 percent decline the previous month
but missing expectations for a 0.3 percent increase.
The Aussie dollar went as low as $0.7020 in the
aftermath of the data.
The currency was already nursing losses from the previous
day when gross domestic product (GDP) figures showed Australia's
$1.3 trillion economy slowed sharply in the second half of last
The soft number increases the risk that economic growth in
the first quarter will remain weak, and adds pressure on the
central bank to ease policy. Household spending accounts for
around 57 percent of Australia's annual GDP.
"After yesterday's disappointing GDP print there was no real
relief in the retail turnover figure for January," said Sarah
Hunter, chief economist for Australia at BIS Oxford Economics.
"This is broadly in line with the underlying pace of growth
seen over the last three months, and suggests that while
conditions for households haven't worsened significantly, they
also haven't improved."
Consumer spending has been weighed down by record-high
household debt and sluggish wage growth, one reason investors
believe the Reserve Bank of Australia (RBA) could now consider
cutting interest rates from an all-time low of 1.50 percent.
Calls from some analysts for the RBA to ease policy this
year have intensified after Wednesday's GDP data.
Futures markets predict a full 25-basis-point cut
in October, a remarkable turnaround from just a couple of months
ago when investors were positioned for a rate hike.
Thursday's figures showed consumers chose to eat out and
spend on food in general rather than splurging on new clothes,
shoes or household goods. New South Wales, of which Sydney is
the capital, was the best performing state in January.
Worryingly, online sales plunged 23 percent in original
terms in January, after rising a meagre 2.2 percent in December.
Less saving and weak spending has already slowed hit some of
Australia's biggest businesses.
Grocers Coles Group Ltd and Woolworths Group Ltd
had disappointing sales in the half to Dec. 31; sales
are down at electronics retailer Harvey Norman Holdings Ltd
; and, on Wednesday the country's biggest department
store chain, Myer Holdings Ltd, posted its fifth
consecutive half-year drop in revenue.
Separate data showed Australia's exporters were enjoying
boom times as the country's trade surplus swelled beyond all
expectations to A$4.5 billion ($3.16 billion) in January, the
second highest on record.
That was far above the A$3.0 billion forecast and owed much
to a surge in gold exports, which more than doubled. In all,
exports jumped 5 percent in January from the previous month, and
were up 16 percent from a year earlier.
($1 = 1.4225 Australian dollars)
(Reporting by Swati Pandey; Editing by Kim Coghill)
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