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NEW ZEALAND: Q3 Consumer Spending Soft, More RBNZ Cuts Likely Before Year End

NEW ZEALAND
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August retail card spending rose 0.2% m/m, the first monthly rise since January, while the total fell 0.2% m/m. Retail sales look like they continued to deteriorate in Q3. This data is included in the list of high frequency indicators the RBNZ is monitoring and is consistent with 25bp rate cuts at the October and November meetings, as consumers remain under pressure and cautious.  

  • Tax cuts came into effect on July 31 and may have helped boost retail spending in August but it is likely too soon to ascertain if they are being spent or saved.
  • Retail spending is down 4.3% y/y after -3.9%, while 3-month momentum is still negative, it is improving. The monthly rise was driven by apparel and durables. Core retail rose 0.4% m/m.
  • Total card transactions were down 1.8% y/y in August after -0.8% with negative momentum also gradually progressing. Services spending increased 0.2% m/m and non-retail ex services fell 0.4%.

New Zealand retail sales y/y%

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August retail card spending rose 0.2% m/m, the first monthly rise since January, while the total fell 0.2% m/m. Retail sales look like they continued to deteriorate in Q3. This data is included in the list of high frequency indicators the RBNZ is monitoring and is consistent with 25bp rate cuts at the October and November meetings, as consumers remain under pressure and cautious.  

  • Tax cuts came into effect on July 31 and may have helped boost retail spending in August but it is likely too soon to ascertain if they are being spent or saved.
  • Retail spending is down 4.3% y/y after -3.9%, while 3-month momentum is still negative, it is improving. The monthly rise was driven by apparel and durables. Core retail rose 0.4% m/m.
  • Total card transactions were down 1.8% y/y in August after -0.8% with negative momentum also gradually progressing. Services spending increased 0.2% m/m and non-retail ex services fell 0.4%.

New Zealand retail sales y/y%

Keep reading...Show less