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Analysts at  ANZ Bank New Zealand Limited explained that today’s data confirmed a weak Q2 (-0.2% q/q) for retail card spending, with June’s 0.8% m/m rise and May’s revised 0.6% m/m rise only partially offsetting April’s 2.2% decline.

Key points:

“Retail spending on electronic cards increased 0.8% m/m in June (seasonally adjusted), following an upwardly revised 0.6% m/m lift in May. Consumables (up 0.6%), hospitality (0.2%) and fuel (1.3%) all reported positive outturns. However, the two consecutive monthly rises were insufficient to offset April’s 2.2% decline.  

Q2 consumer spending was impacted by a very weak April print. On a quarterly basis, the pace of growth is sitting at -0.2% q/q. However, looking forward there are some tentative signs that momentum is picking up, which will coincide with any positive bump owing to the Families Package, which came into force on July 1.

‘Core’ retail spending, which strips out motor vehicle-related spending, posted seasonally adjusted 0.6% m/m outturns in both May and June, after falling 2.2% m/m in April. This shows some resilience in consumer spending and that wallets haven’t closed just yet. In trend terms, monthly growth in core spending has been tracking sideways with three consecutive 0.2% m/m rises, down from an average of 0.3% m/m in Q1.

Overall, we’re left with a pretty modest picture for consumer spending, but with some tentative signs that it’s not over yet. This is consistent with our June ANZ-Roy Morgan Consumer confidence survey which slipped to average levels in June.”