Australia’s Retail Sales unexpectedly fell -1.0% in July, disappointing economists’ forecasts for a gain of 0.5%. Department store sales led losses to slip -3.6%, the most in five months, while food and apparel sales fell -1.9% and -0.6% respectively. The report suggests the boost to spending from the government’s A$20 billion in cash handouts is beginning to dissipate, with retail activity likely to accelerate lower as unemployment continues higher. Indeed, a survey of economists conducted by Bloomberg forecasts the jobless rate, now at a six-year high of 5.8%, will rise to average 6.25% this year and 7.9% in 2010. The Australian Dollar dropped sharply lower on the announcement, slipping below the 0.86 figure.
