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Retail Spending Very Weak

NEW ZEALAND

The RBNZ noted some higher frequency indicators that it looks at and drove its view that there was greater excess capacity in the economy than previously thought influencing Wednesday’s 25bp rate cut. One of these indicators is card transactions and July printed today up 0.7% m/m to be down 0.8% y/y but retail fell 0.1% m/m and 3.9% y/y, the sixth consecutive monthly decline. July is in line with the RBNZ’s view of weak growth.

  • Core retail spending was weaker than the headline falling 0.5% m/m. Hospitality and apparel fell sharply, while motor vehicles and fuel rose strongly and consumables moderately.
  • Non-retail ex services, which includes health and travel, rose 2.1% m/m, while services increased 0.7% m/m.
NZ card transactions y/y%

Source: MNI - Market News/Refinitiv

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