-Adam Boyton, chief economist at Deutsche Bank
Australia's retail sales rose in January, adding to signs that consumer spending is gradually increasing in response to lower interest rates. Retail sales climbed 0.4% to $23.88 billion in January after rising 0.2% in the preceding month, the Australian Bureau of Statistics reported. Four of the six retail sub-sectors contributed to the increase in retail sales, led by rises of 2.2% for department store sales and 2% for cafes, restaurants and takeaways.
Meanwhile, a separate report showed Australia's trade balance gap almost doubled in January, due to increase in imports. The trade deficit widened to $980 million in January from a revised $503 million a month earlier, the Australian Bureau of Statistics said, coming in weaker than economists' expectations of a deficit worth $940 million. The value of imports surged by 3% in the reported month, influenced by a weaker Australian Dollar. Exports climbed 1% in seasonally-adjusted terms over the month, driven by a 2% increase in non-rural good exports. Australia's trade sector has been struggling over the last few years, particularly as prices of some of Australia's main export goods have plummeted sharply, such as iron ore. Export commodity prices have tumbled 20% last year, and are down 41% from a peak in July 2011, according to Reserve Bank of Australia's data.
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