Electronic card spending flat

Electronic card spending remained flat in June. Photo from the ODT files.
Electronic card spending remained flat in June. Photo from the ODT files.
The flat outcome in retail spending in June was softer than expectations but does not change the view of a continued improvement in underlying household spending.

Consumer confidence remains high, supported by an improvement in the labour market which should encourage further growth in household spending.

ASB economist Christina Leung said there were no fresh implications for monetary policy from the Statistics New Zealand data released yesterday.

''We continue to expect the Reserve Bank will again lift the official cast rate at the July 24 meeting, before pausing until December.''

There were a few areas of softness in the figures, including a 0.7% fall in spending on durables.

That was likely to reflect the easing in housing market activity in recent months.

Spending on durables had increased since late 2012, in line with house sales as households purchased appliances and furniture to furnish their new homes.

Recent consumer confidence surveys noted continued high levels of optimism in regards to big-ticket purchases and growth in durables spending was expected to continue, Ms Leung said.

The high level of consumer confidence was underpinning other areas of discretionary spending on vehicles and eating out over June.

Those areas were expected to show continued growth in the coming year, as the household sector was encouraged by continued improvement in the labour market.

The 1.6% increase in fuel spending in June was broadly in line with the increase in petrol prices in the month, she said.

''Overall, the picture of continued momentum in household spending remains intact. Households are showing increased optimism in regards to eating out and making big-ticket purchases. Recent business confidence surveys also show the retail sector remaining fairly buoyant,'' Ms Leung said.


 

Electronic card transactions
 •Total retail: 0% in June, 5.2% for year ended June
 •Ex-auto and services: -0.4% in June, 4.5% for year ended June


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