Australian Bureau of Statistic’s data indicates a slowdown in economic activity

Data released yesterday by the Australian Bureau of Statistics has fuelled speculation that the Reserve Bank of Australia will most likely leave the cash rate at 6 per cent at its board meeting next week.

The ABS data showed business running down stockpiles, manufacturers’ sales falling and merchandise imports slumping for the second month in a row.

This data combined with previous data showing decrease in retail sales and declining consumer confidence, all points to a slowdown in economic activity.

ABS international trade data showed that the recent turnaround in Australia’s trade performance continued in April.

The deficit in trade in goods and service narrowed by $272 million to $556 million, the smallest monthly trade deficit for more than two years.

Although the figures had little impact yesterday, analyst expect a steady improvement in trade numbers should take some weight off the Australian Dollar over the coming months.

As previously mentioned all this economic data suggests that interest rates in the short term are likely to remain steady.