SYDNEY (Reuters) – Australian retail sales fizzled out in July as tight-fisted shoppers held back from spending on household goods, clothing and department stores, pointing to a subdued start for the third quarter of the year.
Monday’s figures from the Australian Bureau of Statistics (ABS) showed retail sales for July were flat, the weakest result since March. That lagged expectations of 0.3 percent growth and followed a respectable 0.4 percent rise in June.
Clothing and footwear led declines with a 2 percent fall while sales at department stores eased 1.9 percent and household goods retailing faltered 1.2 percent. The declines were offset by gains in food, cafes and restaurants – a category that has remained resilient over the past year or so.
The data weighed on the Australian dollar AUD=D3 which slipped to $0.7166, the lowest since early 2017. The currency was last at $0.7177, off 0.2 percent.
The disappointing sales come as economists worry about the impact on household consumption from snail-paced wage growth and a slowdown in Australia’s once-booming housing market.
Data out earlier in the day showed home prices fell for the 11th straight month in August as banks tighten lending standards amid damaging revelations of some of their business practices.
Lending growth is at its weakest in more than 4 years while measures of consumer confidence have remained subdued for more than a year now.
Monday’s retail sales data will also be discouraging to the Reserve Bank of Australia (RBA) which has repeatedly singled out household consumption as a “continuing source of uncertainty.”
The central bank is all but certain to keep rates at 1.50 percent at its monthly policy meeting on Tuesday.
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