Sales were little changed from a month earlier, when they rose 0.2 percent, the Bureau of Statistics said in Sydney today. The result compares with the median forecast (AURSTSA) in a Bloomberg News survey of 20 economists for a 0.4 percent gain.
The currency fell as traders increased bets that Reserve Bank of Australia Governor Glenn Stevens will lower the nation’s benchmark interest rate again after quarter percentage-point cuts Nov. 1 and Dec. 6. The unemployment rate rose in November on mounting concern about weaker global growth.
“It was a disappointing result,” said Michael Turner, an economist at RBC Capital Markets Ltd. in Sydney. “We don’t expect a bounce in December either given the early part of the month was soft from what we understand.”
The Australia dollar bought $1.0165 at 12:32 p.m. in Sydney, down from $1.0179 before the data.
Spending on other retailing, a category that includes recreational goods and books, rose 0.3 percent, and consumers spent 0.1 percent more at cafes and restaurants, today’s report showed. They spent 0.4 percent less on clothing and footwear, and 0.1 percent less at department stores, it showed.
Sales at food and household goods retailers were unchanged from October, it showed.
Weaker Equities
The S&P/ASX 200 Index of stocks dropped 4.2 percent in November and the currency weakened 2.4 percent.
Wesfarmers Ltd. (WES), Australia’s second-largest retailer, said in October that first-quarter sales growth rose to 8 percent at its Coles supermarket unit as lower prices lured customers.
Revenue at Coles climbed to A$8.1 billion ($8.3 billion) in the three months ended September from A$7.5 billion a year earlier, Perth-based Wesfarmers said in a filing Oct. 20. That compares with first-quarter growth of 4.9 percent a year ago.
Lower prices for staples such as bread, milk and eggs has enabled Coles to win back customers and reverse market share losses to Woolworths Ltd. (WOW) and smaller chains as its home improvement chain Bunnings adds new stores.
In response, Woolworths announced that it plans to add 10,000 jobs in the current financial year as it opens 39 new supermarkets and expands its Masters home-improvement venture with Mooresville, North Carolina-based Lowe’s Cos.
Electronics
Harvey Norman Holdings Ltd. (HVN), Australia’s biggest electronics retailer, said in October that sales fell in the three months through Sept. 30. It cited the strength of the local currency and “intense competition” for the weakness.
Stevens lowered the nation’s benchmark interest rate to 4.5 percent from 4.75 percent on Nov. 1, the first reduction since April 2009, and eased to 4.25 percent the following month. Futures traders are betting Stevens will cut again next month as Europe’s sovereign debt crisis intensifies.
Australia’s jobless rate rose in November to 5.3 percent from 5.2 percent, as employers cut 6,300 workers, according to a government report released Dec. 8.
Australia’s higher borrowing costs relative to other developed-world economies and the mining-investment boom helped drive the Australian dollar to $1.1081 on July 27, the highest since exchange controls were scrapped in 1983.
Europe’s fiscal troubles have weighed on the so-called Aussie in recent months. The world’s fifth most-traded currency fell 7.9 percent from that peak on concern Greece would default and trigger a repeat of the 2008 credit freeze that followed the collapse of Lehman Brothers Holdings Inc.
To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
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