Lift in spending exceeds forecast

Consumers reached for their wallets in June as spending surged 1.3% from the previous month, well ahead of the 0.5% market estimate.

Core retail transactions were not left behind, accelerating 1% in June from 0% in May - the third-fastest pace of growth in 18 months.

ASB economist Daniel Snowden said only one sector, consumables, did not better May's results.

The biggest turnaround was in apparel as consumers made up for lost time as winter finally arrived despite the weather still being warmer than usual. The sector "bounced'' to 3.5% month-on-month as consumers caught up after May.

The tourism boom continued. Hospitality swung to 1.5% growth in June from a fall of 0.7% in May, The June result was the largest upwards swing since last October and November, he said.

"This jump is in spite of the continued underlying strength of the New Zealand dollar, although there could be a spot of catch-up from May's softness.''

It was no surprise to see spending on transport and fuel rising 2.8% in June from -1.5% in May, Mr Snowden said.

Spending on vehicles themselves demonstrated a modest recovery at 0.6% although it was usually a volatile component of the data.

Statistics New Zealand figures showed all six retail industries recorded gains in June, the first time that has happened since March last year.

Consumer spending was being underpinned by record low interest rates and an expanded population due to record high migration and tourism levels.

Spending on durable goods, which includes furniture, hardware and appliances, as well as pharmacy, cosmetic and toiletry retailing, has gained every month so far this year.

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