Consumer spending continues to hold up, although signs of a slowdown are emerging, according to the latest Spending Tracker from Kiwibank.
Kiwibank electronic card spending rose 3.1 per cent in the September quarter.
A big jump in spending on entertainment and a broad shift towards spending on services, and away from goods, underpinned the trend.
"Historically low unemployment continues to support households' income, and in turn, consumption," said Kiwibank chief economist Jarrod Kerr.
"Households however are faced with a tough trio of rising interest rates, elevated cost of living, and falling house prices.
"In an increasingly expensive environment, the appetite to spend weakens. Evidence of this is already piling up."
When adjusted for inflation, consumer spending rose by a lesser degree, up 2.1 per cent.
"A third of the spending categories monitored by Kiwibank Economics recorded a drop in the volume of transactions made over the quarter," Kerr said.
"All were concentrated within the discretionary spending space."
A slowdown in consumption was "by design" with the Reserve Bank hiking interest rates.
"It's needed to cool demand, restore balance in the economy, and ultimately, return the inflation beast to its cave," Kerr said.
As Covid restrictions relaxed, the composition of consumer spending was evolving.
New Zealanders were increasingly shifting away from spending on goods and towards spending on services.
Over the quarter, total services spending expanded by 11 per cent. Total spending on goods fell slightly, declining 0.7 per cent.
Entertainment spending rose 10 per cent over the September quarter.
Spending on sporting events was especially strong, up almost 5 per cent.
"Between rugby and football, there were plenty of opportunities to watch our national teams on home turf," Kerr said.
A rotation away from goods was to be expected after two years of spending on everything from pools to pizza ovens, he said.
"Retail goods have had their time in the sun. Now, the rising interest rate environment poses a challenge for retailers as households tighten their belts. The upcoming gift-giving season however may delay the pain."
Housing-related spending continued to fall over the quarter, down 4.5 per cent.
"Consumer confidence has weakened, credit is harder to get, and the housing market is in retreat. Households are just not in the mood to splash out on big-ticket items," Kerr said.
New Zealanders were spending less on the home and taking fewer trips to hardware stores.
The value of petrol spending fell 4 per cent, due to a combination of falling prices and fewer visits to the petrol station.
Petrol consumption was weak.
With relatively cheap public transport and working from home, Kiwis were opting for greener alternatives, Kerr said.