Australia's trade deficit blew out to a record in February as bad weather and supply bottlenecks dented exports of coal and iron ore, while solid business spending at home kept imports near all-time highs.
The deficit on goods and services widened to A$3.29 billion (US$3 billion) in February, up almost a third from January's A$2.53 billion and way above market forecasts of A$2.5 billion.
The figures implied trade was likely to take a chunk out of economic growth in a first quarter that was already looking soft due to a pullback in consumption after interest rate hikes in February and March.
"Softness all around," said Stephen Roberts, a research director at Lehman Brothers, noting that other data out on Monday showed subdued home building and a second straight month of falls in job advertisements.
"All told, the data confirms we have a softer growth trend moving through at least the first quarter. This should keep the pressure off the Reserve Bank to raise interest rates further," said Roberts.
The Reserve Bank of Australia (RBA) has raised rates four times since August, taking its benchmark rate to a 12-year high of 7.25 percent, in a campaign to cool the booming economy and restrain inflation.
Last week RBA Governor Glenn Stevens signaled that demand was indeed starting to moderate, leading investors to price out almost any chance of another tightening.
On Monday, markets reacted to the trade blow-out by knocking the Australian dollar lower, while bond futures climbed on speculation the next move in interest rates could be down.
"The data is going to add to sentiment that the economy is stepping back a bit earlier than widely thought, and certainly suggests our current, relatively moderate forecast for economic growth in the first quarter is under downward pressure," said Scott Haslem, chief economist at UBS. "We continue to see the RBA on hold."
One area of potential strength was supposed to be resource exports as Australia's miners are working flat out to meet insatiable demand from China and the rest of Asia.
Yet exports fell 4.1 percent in February as supply disruptions cut shipments of iron ore by 18 percent and coal by 16 percent. Imports eased just 0.2 percent as businesses bought more heavy capital equipment to expand production.
Still, the trade deficit should narrow markedly later this year as hefty price rises are likely for coal and iron ore.
"Given the price of iron ore is going to rise by 70 percent for this financial year, and the price of coal looks like it will almost triple, you would expect substantial improvement in export values in the months ahead," said Stephen Halmarick, co-head of market economics at Citi.
Another area of softness has been home construction, as record low affordability and rising mortgage costs put new houses beyond the reach of many would-be buyers.
Other government figures out on Monday showed approvals to build new homes rose a bare 0.1 percent in February, leaving them 1.6 percent below the levels of February 2007.
Meanwhile, a survey of job advertisements showed a 0.7 percent drop in March, pointing to some slowing in the furious pace of hiring enjoyed in the last couple of years.
Monthly employment numbers are due on Thursday and analysts had already forecast a relatively subdued rise of 10,000 following a string of surprisingly big gains.