Sydney — Australia’s economy shrank for the first time in more than five years last quarter as businesses, consumers and government all cut back on spending, an unexpected blow that will challenge policy makers’ optimism for growth. The Australian dollar sank about half a cent after the Australian Bureau of Statistics reported GDP fell 0.5% in the third quarter, from the second when it rose a revised 0.6%. That was the first contraction since early 2011 and only the fourth since the country’s last recession in 1991. The value of all goods and services was 1.8% higher than the same quarter last year, pulling back sharply from about 3.1% in the second quarter. Business investment was the biggest drag, with miners still unwinding a decade-long spending boom, while home building retreated after a very strong run. The contraction was a major embarrassment to the conservative government of Malcolm Turnbull that won an election in July on a promise of delivering growth and jobs. It was als...
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