New Zealand Quarterly Spending Rises for First in 7 Periods on Cash Handouts
New Zealand Retail Sales spending rose 0.1% in June, much stronger than the anticipated 0.3% contractionary figure. Despite a continued growth, spending gains still performed weaker than in the previous month. The previous period may have been a simple green shoot as the figure happened to be the strongest of such in 12 months. Spending in the three months ending June, however, saw the first gain in retail sales in seven quarters. Such activity occurred in a period in which wages grew by the slowest pace in 10 years, adding to speculation that much of this spree has been led by cash handouts implemented by the New Zealand government. Additionally, it does seem odd that a turnaround of this magnitude could occur at such a rapid pace; the previous quarter's sales figure contracted 2.7%. As the market mechanism kicks in again and the government's cash handouts are phased from the metric, labor market weakness will regain the reigns. Keep in mind that the country's Finance Minister, Bill English, stated two weeks ago that the administration expects the unemployment rate to continue rising for quite some time.