11 Aug 2010

Core spending using electronic cards rises

7:46 am on 11 August 2010

Spending using electronic cards, which covers about two thirds of retail sales, fell a seasonally adjusted 0.1% in July, though core spending, which excludes volatile fuel and car sales, rose 0.7% to $3.25 billion.

It's the third consecutive monthly rise, but Goldman Sachs economist Philip Borkin says the pickup is sluggish, and consumers remain cautious compared to previous recoveries.

Mr Borkin says retailers are having to offer significant discounts to get shoppers through the door, and there's so far been no real evidence of a spending splurge ahead of the GST hike in October.

However ANZ economist Mark Smith, says the 1.4% increase in core retail spending over the last three months is respectable, and may prompt the Reserve Bank to rethink its view of the domestic economy.