"Households are worried about the economy and job prospects so are keeping a lid on spending"
- Katrina Ell, an economist at Moody's Analytics
Australian trade and domestic consumption improved in May, pointing at the improvement both locally and globally. The Australian Bureau of Statistics reported that the nation's trade surplus widened in May, reaching $670 million, supported by record exports to the world's second largest economy. The result outpaces analysts' estimation, who had expected a trade surplus of only $53 million. It was the fourth consecutive monthly surplus, which accelerated further from the previous month's reading of $171 million. Data also showed that shipments to China soared by $718 million over the month to a record $8,104 million, while its share of total exports hit a record high of 35.6%.
The Australian statistics office also said that the nation's retail sales rose less than expected in May, as consumers cut their spending on dining out and household goods. Sales at retailers gained 0.1% to $21.8 billion from the previous month, when they fell a revised 0.1%. The results compares with the median analysts' projection of a 0.3% increase. At the same time the RBA Governor Glenn Stevens stressed out that policy members were deliberating for a long time before keeping its key refinancing rate unchanged. The RBA has cut borrowing costs by 2% between November 2011 and May to 2.75%, following global counterparts to reach record-low rates.
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