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Australian retail sales unexpectedly fall as economy slows

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Australian retail sales unexpectedly fell in July, the first drop since May 2014, as highly-indebted consumers put away their pocketbooks.

[SYDNEY] Australian retail sales unexpectedly fell in July, the first drop since May 2014, as highly-indebted consumers put away their pocketbooks.

Sales fell 0.1 per cent from a month earlier, when they rose a revised 0.6 per cent - lower than first reported, government data showed Thursday. The result compares with the median estimate in a Bloomberg survey of 26 economists for a 0.4 per cent gain.

The data corresponds with a rise in the household savings rate and suggests little improvement in the economy at the start of the third quarter after growth slowed to an anemic 0.2 per cent in the second quarter. The weaker than expected sales could add to the case for the central bank to lower interest rates further from a record-low 2 per cent.

Today's data showed household goods fell 1.9 per cent, the biggest drop among six categories surveyed, and other retailing declined 0.6 per cent. Food sales were flat in July, while clothing, footwear and personal accessories jumped 2.9 per cent.

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The local dollar traded at 70.11 US cents at 11:45 am in Sydney from 70.38 before the release.

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