Higher fuel prices and weak job market dragged NZ electronic card spending down for third consecutive month in October

Electronic card spending fell for a third consecutive month, but ASB economists are still forecasting turnarounds in cost-of-living pressures and the weak labour market will begin next year.

Statistics New Zealand’s electronic card transactions for October show retail spending fell by 0.7%, or $47 million, last month. This is a larger fall from the 0.4% monthly decrease in retail spending that Stats NZ reported in September and the third month in a row where card spending declined.

Actual core retail card spending  – which doesn’t include fuel and motor vehicles – fell 1.2%, or $73 million, in October compared to September. This was a much bigger decline than the 0.7% decline in core retail spending reported in the prior month. October marks the third consecutive month core retail card spending has fallen as well.

The total amount spent using electronic cards in October came to $9.6 billion. Stats NZ said in actual terms, cardholders made 173 million transactions across all industries during the month, with an average value of $56 per transaction.

The $56 per transaction figure is up from $54 per transaction a year ago in October 2025.

By retail spending category, movements in October (compared to a month earlier) were:

• durables, down 2.1% or $34 million
• hospitality, down 1.6% or $23 million
• consumables, down 0.3% or $7.5 million
• motor vehicles (excluding fuel), down 2% or $3.8 million
• apparel, down 0.7% or $2.2 million
• fuel, up 4.8% or $25 million

ASB economist Yen Nguyen said once adjusted for inflation, October’s electronic card data suggests consumer spending was even softer than the latest figures show.

She said the pullback in durables and discretionary spending “gathered pace” during October, with spending on durables, hospitality and apparel declining for the third consecutive month and experiencing even bigger annual falls. On an annual basis, durables spending was down 2.4%, hospitality spending fell 4.4% and apparel spending was down 3.2%. 

Spending on vehicles continues to fluctuate – down 2% since September – recording the largest monthly fall since April, according to Nguyen.

“Meanwhile, fuel spending recorded its third consecutive monthly lift, increasing by 4.8% month-on-month, though the growth was lower than the substantial rise in fuel prices over the month (with double-digit gains for petrol and diesel prices), suggesting that people are choosing to drive less where they can,” she said.

ASB continues to expect to see a gradual recovery in consumer spending take hold in 2027 as acute cost-of-living pressures subside and the labour market recovers.

“Today’s data highlights the fact that high fuel prices are taxing consumption.  Consumers have less at the end of the day to spend elsewhere once they’ve filled up the car.  The weak labour market (with the unemployment rate hitting a fresh 11-year high in the third quarter 2026) is another constraining factor,” Nguyen said.

New Zealand’s jobless rate climbed to its highest level in more than a decade in the September quarter, increasing to 5.7% with 174,000 people unemployed. The last time the unemployment rate was at 5.7% was in the September 2015 quarter.

“Looking ahead, NZ consumer spending is expected to remain soft over the rest of 2026, given prevalent headwinds.  The low NZD should continue to support incomes in regions with high exposure to the primary and tourism sectors, but we are seeing limited spillovers at this stage into other parts of the economy.  However, the weaker currency is adding to inflation, which is another headwind for domestic consumers more broadly,” Nguyen said.