Australian Consumer Economy in Trouble
Another recently-strong economy is headed in the wrong direction: according to this MarketWatch article, Australia’s consumer spending increased only 0.2% in December, down from 0.4% in November. Analysts had expected an 0.5% increase, so the 0.2% was a nasty shock.
Now, no one can blame Australians for staying home and generally being stingy with their dollars. Back-to-back natural disasters (flooding followed by a cyclone) have wreaked havoc on portions of the country. This affects not only the directly afflicted areas but the overall mood of the entire continent.
Myer Holdings, Australia’s biggest department store operator, has been hit particularly hard. In addition to weather challenges, a stronger Australian dollar encourages their customer base to import goods instead of purchasing at local stores. Still, the company has some tricks up its sleeve: they recently acquired a 65% stake in popular Australian women’s fashion brand Sass & Bide.
