Seasonally adjusted spending with electronic cards picked up again in June in a sign consumers may not have shut their wallets as tightly as some economists had feared.
Statistics NZ said transactions in core retail, which excludes the motor vehicle-related industries, rose 0.6% in June, following a 1.1% rise in May.
The numbers, which do not include sales with cash or cheques, are the earliest official signs of retail spending and are closely watched by the Reserve Bank as it considers what to do with the Official Cash Rate. Any signs of very weak retail spending might have held the Reserve Bank back from another rate hike on July 28.
(Updated with comments from ASB economist Christina Leung on growing signs of optimism from retailers)
"Led by consumables (which includes food, liquor, and chemist retailing), all core retail industry groups recorded rises in June. In the retail industries, transactions were up 0.4 percent. This was less than for core retail due to a 3.1 percent fall in the fuel retailing industry," Statistics NZ said.
When the non-retail industries (which include services such as travel and health, and wholesaling) are included, the total value of transactions rose by 0.7%. The non-retail industries rose 1.5%.
"The core retail trend has picked up in the last few months. Trends for the value of transactions in the total and retail series have both been relatively flat in recent months," Statistics NZ said.
Debit and not credit
Credit card use as a proportion of the total transaction value has been falling since September 2008, with a corresponding rise in debit card use).
"Credit cards accounted for 44.0 percent of transactions in the year to June 2010, the lowest proportion since the series began."
ASB economist Christina Leung said the figures were some cause for optimism.
"The improvement in spending in June was broad-based, with only spending in the fuel retailing group declining. This decline in fuel retailing reflects the fall in petrol prices that month, which we estimate to have been around 3%," Leung said.
RWC tickets
There was a modest rebound in spending on clothes, vehicles and also in hospitality, which may be due to the purchase of Rugby World Cup tickets, Leung said, adding around 90% of the 750,000 tickets released for sale were charged on credit cards in June.
"We expect retail spending will pick up over the coming months as households bring forward purchases of big-ticket items ahead of the GST increase on 1st October. Indeed, recent business surveys point to growing optimism of rising sales amongst retailers," she said.
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