Australia retail sales rise, trade gap narrows
Australia's retail sales advanced more than economists forecast in September and the nation's trade deficit narrowed by the most in five months, sending the local currency higher ahead of tomorrow's central bank meeting.
Sales climbed 0.5 percent to A$21.6 billion ($22.4 billion) from August, when they rose a revised 0.3 percent, the Bureau of Statistics said in Sydney today. That exceeded the median forecast for a 0.4 percent gain. The trade shortfall shrank by A$420 million to A$1.46 billion in September, also more than forecasts.
Consumer spending has been fueled by interest-rate reductions since November 2011 as the Reserve Bank of Australia tries to buttress demand outside of a resource boom that may crest next year. Central bank Governor Glenn Stevens cut the key rate by a quarter percentage point last month to 3.25 percent, and traders are pricing in a 54 percent chance he will lower borrowing costs again tomorrow.
"The RBA has eased somewhat pre-emptively," said Michael Turner, an economist at RBC Capital Markets Ltd. in Sydney. "Whether the board sees fit to move again as soon as tomorrow has become an increasingly uncertain prospect given the stabilization in data in China and the US"
The Australian currency, which has risen 52 percent in the past four years, traded at $1.0363 at 1:34 p.m. in Sydney compared with $1.0344 before the release.
Today's retail report showed spending on household goods gained 1.2 percent, while consumers spent 0.6 percent more on food and 0.8 percent more on a category labeled other retailing. They spent 0.6 less on clothing, footwear and personal accessories and cut departmentstore purchases by 0.5 percent, it showed.
Woolworths Ltd. (WOW), Australia's largest retailer, posted the fastest first-quarter sales growth from supermarkets open at least a year since 2009 as promotions and food price inflation drove growth, the company said in an Oct. 18 statement.
Retail sales, adjusted to remove inflation, declined 0.1 percent in the three months through September from the previous quarter. Economists had forecast a 0.2 percent decline.
The trade report showed exports fell 1 percent to A$24.2 billion, led by an 11 percent drop in metal ores and minerals. Imports declined 2 percent to A$25.6 billion on an 11 percent drop in machinery and industrial equipment and a 34 percent fall in a category that includes civil aircraft, the report showed.
Australian employers hired almost three times the number of workers economists forecast in September, a government report showed Oct. 11, even as the unemployment rate jumped to 5.4 percent, the highest since April 2010, from 5.1 percent. A private report