Nov. 14 (BusinessDesk) – 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 percent, seasonally adjusted, in the three months ended Sept. 30, for a 2.1 percent gain from a year earlier, according to Statistics New Zealand. A quarterly gain of 0.5 percent was forecast in a Reuters survey, for an annual increase of 2.9 percent.
The third quarter retail sales data comes after figures showed the jobless rate unexpectedly jumped to 7.3 percent, 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 Dec. 6. Markets were pricing in a 24 percent chance of a cut to the official cash rate next month.
The kiwi dollar 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 auto-related categories, retail sales volumes were down 0.3 percent. The value of sales fell 0.8 percent.
Supermarket and grocery store sales fell 1.5 percent, accommodation was down 3.2 percent and motor vehicles and auto parts fell 0.9 percent.
Hardware, building and garden supplies recorded the biggest gain, up 4.2 percent, which the government statistician said reflected increased sales in Canterbury.
The value of sales in the North Island fell 0.4 percent in the latest quarter while South Island sales rose 0.7 percent.