Aussie consumers spooked as sales show weakest run in 7 years

November 5, 2017 – Bloomberg Market’s Michael Heath reports that Australia’s heavily indebted households are pulling down the shutters on consumption as retail sales suffered the weakest three-month stretch in seven years.

Aus Opera House

Sales were flat in September, after slumping 0.5 percent the prior month and dropping 0.3 percent in July, government data showed Friday. That’s the worst run since 2010. The currency dropped and traders pared bets on interest-rate hikes as the numbers suggested households are struggling to cope with record-high debt and record-low wage growth.

“The retail sector is on the ropes,” said Paul Dales, chief economist for Australia at Capital Economics Ltd. “Retailers discounted by more than usual and didn’t get much of a return from it.” He now estimates that gross domestic product slowed in the third quarter to 0.5 percent from 0.8 percent three months earlier.

The Australian dollar bought 76 US cents as of this date.

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