Fed:Retail spending drops again in February

AAP General News (Australia)
04-04-2008
Fed:Retail spending drops again in February

CANBERRA, April 4 AAP - Consumer spending growth has fallen for a second straight month
in an indication rising interest rates are taking a toll on household budgets.

Retail trade fell by a seasonally-adjusted 0.1 per cent in February to $20.1 billion
after a downwardly-revised 0.1 per cent decline in January, Australian Bureau of Statistics
data shows.

Economists had expected a 0.4 per cent increase.

The Reserve Bank of Australia (RBA) raised interest rates in February as it tried to
grapple with a surge in inflation pressures.

It subsequently raised rates again in March, but left the official cash rate steady
this month at a 12-year high of 7.25 per cent.

RBA Governor Glenn Stevens, speaking to parliament's economics committee today in Sydney,
said there were tentative signs of domestic demand slowing, but couldn't promise that
rates won't rise again.

AAP cb/rl/imc/de

KEYWORD: RETAIL

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