Australian retail sales stagnated and the nation’s trade deficit blew out to a record in April, in a challenge to a central bank trying to spur an economic recovery. The currency slumped half a U.S. cent as sales were little changed from a month earlier, when they rose a downwardly revised 0.2 percent, and were less than the forecast 0.3 percent gain, data showed Thursday. The trade gap widened to A$3.89 billion, surpassing the previous record in February 2008, as storms shut coal ports and limited shipments.
The data signal a deterioration at the start of the second quarter from strong economic growth in the prior three months as households’ balance sheets come under pressure from weak wages growth. The Reserve Bank of Australia has sought to release some of the nation’s savings via record-low interest rates to bring forward consumption and support the economy during the unwinding of a mining investment boom.
“The numbers highlight two key challenges for the economy, one is a lackluster consumer,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. The RBA “probably are disappointed. They’ve been trying to talk up the consumer for a bit.”