Retail sales unexpectedly fall in third quarter, kiwi slides
New Zealand retail sales volumes unexpectedly fell in the third quarter, led by supermarkets and motor vehicles, sending the kiwi dollar lower on speculation the economy is weak enough to warrant a rate cut from the Reserve Bank next month.
The volume of retail sales fell 0.4%, seasonally adjusted, in the three months ended September 30, for a 2.1% gain from a year earlier, Statistics New Zealand says. A quarterly gain of 0.5% was forecast in a Reuters survey, for an annual increase of 2.9%.
The third-quarter retail sales data comes after figures showed the jobless rate unexpectedly jumped to 7.3%, suggesting the economy's pace is stumbling.
Reserve Bank governor Graeme Wheeler has said he has room to cut interest rates if needed and his next review is on December 6. Markets were pricing in a 24% chance of a cut to the official cash rate next month.
The kiwi dropped to 81.54 US cents after the numbers, from 81.91 cents immediately before the report was released.
Nine of the 15 retail industries had lower sales volumes in the latest quarter. Excluding vehicle-related categories, retail sales volumes were down 0.3%. The value of sales fell 0.8%.
Supermarket and grocery store sales slid 1.5%, accommodation was down 3.2% and motor vehicles and auto parts fell 0.9%.
Hardware, building and garden supplies recorded the biggest gain, up 4.2%, which the government statistician says reflects increased sales in Canterbury.
The value of sales in the North Island fell 0.4% in the latest quarter, while South Island sales rose 0.7%.