November card use stronger

Christmas shopping looks promising after higher November retail card spending. PHOTO: LINDA...
Christmas shopping looks promising after higher November retail card spending. PHOTO: LINDA ROBERTSON
November retail card spending was considerably stronger than market expectations, boosted by a 5% rise in fuel spending and in line with the rise in petrol prices during the month.

Retail card spending rose 1.2%, stronger than market expectations and core spending was also strong, hitting a seven-month high.

Spending in the core retail categories rose 0.8%, led by a 1.2% rise in both durables and hospitality, and a 2.7% rise in clothing.

Westpac senior economist Michael Gordon said anecdotally retailers were increasingly adopting the United States trend of ``Black Friday'' sales.

``The jury is out on whether this leads to more spending or simply shifts the timing of spending.''

One factor which could have contributed to the recent lift in consumer spending was the link to housing wealth.

House prices flattened out over the first half of this year but had risen again in recent months and card spending had more or less followed suit.

``The strength of the housing market is a critical part of our outlook for the New Zealand economy. We expect the new Government's policies aimed at cooling housing demand will see house prices fall slightly in 2018, which in turn would dampen growth in consumer spending,'' Mr Gordon said.

ASB senior economist Mark Smith said there were no immediate implications for the official cash rate from the retail sales data.

November was the first full month following the formation of the new coalition Government. It was encouraging consumers kept their wallets open and it was promising for Christmas shopping, he said.

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