Sales increase falls short

March-quarter retail sales rose a seasonal and inflation-adjusted 1.3 per cent - well below economists' forecasts of 2 per cent, Statistics New Zealand figures show.

It is the second major economic indicator in as many days to be well below forecasts. On Thursday, the March-quarter unemployment rate rose unexpectedly to 3.9 per cent from 3.6 per cent against forecasts of a fall to 3.5 per cent.

The good news is the two figures will make the Reserve Bank less inclined to raise interest rates at its next review on June 9.

The dollar was already down nearly 1USc yesterday to 71.8c after Thursday's jobless numbers and a stronger US dollar. The retail sales figures were a healthier rise of 2 per cent in the quarter, once vehicle sales were excluded.

Retail sales in March fell a seasonally adjusted 0.5 per cent against forecasts of a 0.7 per cent slide. Sales for January and February were strong.

Actual sales in the March year were up 6.6 per cent.

- NZPA