-Statistics New Zealand
New Zealand retail sales jumped more than expected in the December quarter, led by increased vehicle sales, underscoring upbeat consumer confidence amid low inflation and a growing economy. Sales rose seasonally adjusted 1.7% in the fourth quarter, overshooting market expectations for a 1.3% advance and following a revised 1.6% increase in the preceding quarter. Motor vehicle and parts retailing rose 3.4% in the reported period, experiencing the largest increase in both the sales volume and value, Statistics New Zealand said. Core retail sales volumes, which strip out vehicle-related sales, jumped 1.5% over the December quarter, also beating the market expectations by 0.4 percentage points. The total value of retail sales, which includes the impact of inflation, soared 1.6% to $19.3 billion in the October-December period, pointing to weaker price pressures over the quarter. Actual sales surged 5.9% from the same period last year by volume and rose 4.7% to $20.9 billion in value, marking the first time when sales have exceeded $20 billion.
Strong consumer spending may continue in light of low credit costs and strong employment growth. An increase in spending could eventually underpin inflationary pressures as demand climbs and the nation's economy nears full capacity, issues the Reserve Bank of New Zealand will be watching closely for.
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