New Zealand Retail Sales Collapse on Cars and Oil

New Zealand Retail Sales declined three times more than expected, showing a drop of -1.2% in March. While the extent of the slowdown is certainly notable, the downward trajectory in the retail sector is to be expected. Confidence readings have slumped, and employment registered at 19-year lows. Record interest rates are crushing the economy under the weight of high borrowing costs as the RBNZ tries to squeeze out inflationary pressure. This may prove elusive, as the global boom in energy and food continues to bid up the price level. Today's result mirrors a pattern we saw in US retail sales earlier in the week, with car sales the main culprit of the slump. Tellingly, excluding autos would have seen a drop of only -0.5%. Going further, excluding cars along with related purchases of gasoline and expenses on automotive repairs would have actually seen a rise of 0.2%.

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