ANZ New Zealand inflation gauge rises 0.3 pct in Dec, largest rise since June

ANZ New Zealand inflation gauge for December rose 0.3 percent in December. It was the largest monthly rise since June 2016. The annual rate increased to 2.3 percent (from 2.2 percent prior). On a quarterly 3m/3m basis, prices are up 0.7 percent.

Details showed largest contributions came from rents, purchase of housing and accommodation services. Gains were more broad-based with prices in six of the eight major groups increasing.

“Nonetheless, inflation signals are showing signs of aligning with strength across the economy and diminishing capacity. With momentum across the economy strong and spare capacity being absorbed, the inflation pulse is likely to beat a tad faster. With that comes the reality that the OCR will not stay this low indefinitely.” said Cameron Bagrie, Chief Economist at ANZ bank.

Seperate data showed New Zealand spending on electronic cards was again soft in December, underlying trend was moderating. Retail spending on electronic cards fell in December, easing 0.1% m/m sa. Card transaction figures are notoriously volatile and the fall in December would not usually be alarming. However, concerns mount as it follows weakness in November.