Card Spending Solid, Strong Rises In Some Sectors Reflect Cyclone

Card spending in NZ fell 1.7% m/m in February after rising an upwardly revised 3.4% m/m the previous month. The retail component was flat after rising 2.6% m/m. This left the annual rates off of their recent lows at 15% and 11.8% respectively, although February 2022 was exceptionally weak. The quarterly average to date of retail card spending is up 1.1% q/q, pointing to a solid Q1 rise in retail sales. The resilience of spending is likely to keep the RBNZ in play, although it is still gauging the economic impact of recent natural disasters. It has projected another 75bp of hikes.

• The levels of spending remains historically high and well above pre-pandemic levels. The series is nominal and so inflation will account for a significant part.
• The impact of Cyclone Gabrielle can be seen in the details of the data, although Statistics NZ don’t mention it. There were strong increases in spending on consumer durables and consumables, such as groceries. The largest fall was in non-retail ex services, which includes transport & travel and education.

Source: MNI - Market News/Refinitiv