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Australia’s retail spending in surprise fall in Jul

Australia’s retail sales suffered a surprising spill in July, as consumers shunned department stores after two months of strong spending, denting the local dollar and narrowing market odds for another cut in interest rates. Measures of company profits also posted a surprise fall.

Retail sales dropped 0.8 percent in July to a seasonally adjusted AUD21.418 billion (USD21.98b) following a revised 1.2 percent rise to AUD21.579b in June, according to the Australian Bureau of Statistics, underscoring the ongoing weakness in the sector. A consensus of analysts polled by Bloomberg had tipped a 0.2 percent rise.

The weaker July figure follows two Reserve Bank rate cuts, worth 75 basis points, in May and June, as well as recent cash handouts by the government aimed at supporting household confidence after the recently enacted carbon pricing scheme.