Australian Retail Sales plummeted by 2.0% in February, overshooting expectations that the figure would fall by only -0.5% on a seasonally adjusted basis. Spending weakness isn’t much of a new concept in Australia as sales also shrunk five months ago in September and in the June just prior. Sales haven’t been this weak since Jul. 2000.
Contracting spending may be a symptom of fiscal stimulus’ dying strength. As noted above, this is the first time in five months that this particular figure of economic activity shifts into negative territory. For the ending months of 2008, the metric was in positive territory as the first government stimulus made its way into the pockets of workers and families. An addition to the vernal stimulus was implemented in January, but as February shows, the effort has failed to generate much needed confidence.
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