04 NOV 2014 – Australia’s trade deficit more than doubled to A$2.26bn (Â£1.2b; $1.96bn) in September, data showed.
Exports rose just 1% in the month, while imports were up 6% as Australia brought in more fuel.
The deficit, a balance of goods and services, widened a lot more than market expectations of A$1.95bn and compared to a revised deficit of A$1.013bn in July.
Falling prices of key commodities like iron ore is being blamed for the jump.
“The trade deficit for September came in worse than expected with falling commodity prices clearly weighing on export values,” said AMP Capital chief economist Shane Oliver.
Export earnings in Australia, home to some of the world’s biggest miners like BHP Billiton and Rio Tinto, have been impacted by the slump in prices.
The price of iron ore is down 40% this year, while thermal coal prices are hovering near five-year lows of A$63 a tonne on oversupply in the market and slower demand from China.
The two commodities are Australia’s top two exports.
Mixed economic view
Added to the ballooning trade deficit on Tuesday was revised employment data, which showed a weaker labour market.
New figures showed that 9,000 jobs were lost in August, compared to previous estimated rise of 32,100. But, the number of jobs lost in September was revised to 23,700, less than an initial estimate of 29,700.
The unemployment rate, however, was up to 6.2% in September from a previous estimate of 6.1%.
Mr Oliver of AMP said the economic data showed a mixed picture of the economy, which resulted in the Reserve Bank of Australia (RBA) leaving interest rates at a record low of 2.5% in its policy meeting today.
“Revised jobs data up to September now shows a slightly weaker jobs market over the last two months than previously reported with unemployment now drifting up,” he said.
On the upside, retail sales grew at the fastest pace in 19 months in September, boosted by consumers buying Apple’s new iPhones.
Sales rose 1.2% in September – the biggest gain since February 2013 – and above expectations of an only 0.4% increase.