KEY POINTS:
New Zealand retail sales were strong in the September quarter, reinforcing views that any fall in interest rates will be some time away.
Statistics New Zealand (SNZ) data shows seasonally adjusted retail sales up 1 per cent in the quarter from the previous three months. That was ahead
of the 0.8 per cent median of forecasts by economists in a Reuters poll.
Actual retail sales were up 3.2 per cent on the same quarter a year ago, compared to the median forecast of 3 per cent.
Seasonally adjusted retail sales for the September month were a surprise, up 1.2 per cent on August, well ahead of the median forecast which was for no change.
Actual retail sales for the month of September were 3.7 per cent ahead of a year ago, compared to the 3.1 per cent median forecast.
"Strong, strong, strong -- there's no other way to say it," Citigroup senior economist Annette Beacher said.
"In particular, the jump in September was extraordinarily strong and that sets up spending for the fourth quarter, which looks like being a cracker."
The strength of volumes meant that sales growth wasn't all in prices, which would be a comfort to the Reserve Bank, she said.
"It's all very strong and means the Reserve Bank will keep its tightening bias (on interest rates)."
ANZ National Bank senior economist Khoon Goh said the numbers showed resilience in consumer spending, which was unsurprising given the labour market remained tight and wage growth had been strong.
That reinforced the Reserve Bank's point that interest rates were on hold for quite a long period of ti me.
Deutsche Bank chief economist Darren Gibbs said he suspected the Reserve Bank would discount today's figures as temporary.
"But if we continue to see strong data over the Christmas period and into the New Year, the market will come to think a rate hike could be back on the table," he said.
From buying US65.92c just before the data release, the NZ dollar lifted to US66.22c.
SNZ said that the $160m increase in seasonally adjusted total retail sales in the September quarter, from the previous three months, included a $199m (1.8 per cent) rise in the core retailing group which excluded vehicle-related industries.
Sales for the vehicle-related industries were down $40m, or 0.9 per cent.
The rise in core retail sales came from across-the-board sales increases in the seven food and beverage-related industries, SNZ said.
Those increases were largely price driven, as larger than normal price increases were recorded in six of the industries in the September quarter.
With price effects removed, sales volumes in the vehicle-related industries-excluded core retailing group were up 1.1 per cent, or $109m, in the September quarter compared to the previous three months.
Industries with the largest volume movements were appliance retailing which was up 4.8 per cent, or $50m and motor vehicle retailing up 1.3 per cent, or $29m.
Automotive fuel retailing sales were down 0.9 per cent, or $14m, in the quarter, following an increase of 8 per cent, or $113m, in the previous quarter.
The September quarter fall was largely due to a decrease in prices. With price effects removed, sales were at a similar level to the previous quarter, SNZ said.
Motor vehicle retailing prices fell 2.8 per cent in the September quarter, the biggest decrease since the June 1999 quarter. With price effects removed, sales were up 1.3 per cent.
- NZPA