Brad Olsen: Infometrics Principal Economist on card spending dropping in November

The latest card spending data from November indicates Kiwis are keeping their expenses down for another month.

Kiwibank reports claim the value of spending dropped 2.5 percent in November and new ANZ data shows a drop of 1.2 percent year on year.

Infometrics Principal Economist Brad Olsen says there's hope for the economy - as we're seeing early green shoots ahead of the Christmas season.

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Episode Transcript

Speaker 1 (00:00):
Cards. Spending data from November suggest kiwis are holding their
cards close to their chests literally. Kiwibank says the value
of spending drop two and a half percent in November.
That's down. A and Z says its data shows a
drop of one point two percent year on year two.
Brad Olsen, the Infametric principal economist, is with us tonight. Hey, Brad,
good evening November was still pretty tough.

Speaker 2 (00:22):
Yeah, I mean it's quite clear for a lot of
retailers that of course, although interest rates have started to
come down, not everyone's immediately refixed onto those lower rates,
and so that pressure on household budgets is still pretty clear.
Although a lot of the numbers are showing as still
an annual decline year on year, there are some early
signs in the numbers, both looking at what A and

(00:42):
Z's put out, but also some numbers recently from Worldline
that suggest that going into that Christmas period though there's
a little bit of a shift coming through. So down
on a year ago, but perhaps up a little bit
on where we've been the last couple of months. For example,
the Worldline data suggests it as we're starting to get
into the Christmas preace. There has actually been a lift
in spending compared to last year for the first week

(01:05):
I think it was for Christmas A and Z again
suggesting that when you look at some of that spending
month on month, again a very slight lift. It's not huge,
it's not you know, the economy and spending really starting
to get going. But it's a bit of a change.

Speaker 1 (01:19):
So maybe we've just left around a little bit later
hopefully this year. That's what it's indicating.

Speaker 2 (01:25):
Well, I think as well. You've got a lot of
households that you know, there is a bit more confidence
that has come through the last couple of months. People
can see that light at the end of the tunnel,
they can see better things around the corner. They're still cautious,
you know, people aren't breaking out the champagne bottles yet,
but there's just a little bit of a shift in
terms of people's sentiment, their expectations. Maybe a little bit

(01:45):
more that goes into the present budget. Not a lot,
you're not sort of, you know, doubling up who you're
buying for and giving everyone three presents this year, but
maybe a little bit of a shift in the budget.

Speaker 1 (01:55):
What about the job numbers we got out today had
they look brad job.

Speaker 2 (01:59):
Numbers, and the labor markets still quite challenging. To be fair,
the start is only up until September, and we've seen
again that sort of continued drop as we've been seeing
from a number of other indicators coming through. Stats n
Z reporting that for the September twenty twenty four quarter,
six thousand, seven hundred odd fewer jobs than in June.
Once you take into account seasonality, the biggest drops occurring

(02:21):
in the likes of construction, accommodation and food services and
admin role. So still quite tough out there, and in
particular you're seeing some sort of big drops in different
parts of the country. Auckland down nearly seven thousand roles
compared to where we were midyear, so all of that
is dropping away. Interestingly, although we normally in economic downturns

(02:43):
see that the likes of women often suffer greater levels
of unemployment, actually this time with a much higher construction
drop off, that's been affecting more males and seeing that
group dropping out of work a bit more so. Overall,
labor markets still tough, but maybe some early changes coming
through in the spending likely not immediately but likely into

(03:04):
twenty twenty five to support a bit of a shift
around in jobs. But we know the jobs market always
takes a bit longer to shift.

Speaker 1 (03:11):
Yeah, and we've still got I mean that the unemployment
numbers for next year aren't looking to Rosie ave for
us here heading it, I think topping at five and
a half percent by the middle of next year, right.

Speaker 2 (03:22):
Well, and that's the thing. I mean that the four
cars sort of range from about two point five sorry,
five point two through to five point five. You're right,
But regardless, that's still a lot of people who are
obviously finding it more difficult. We've also seen this year
more people dropping out of the jobs market sort of entirely.
They're not even becoming unemployed, they're becoming so disenfranchised they're
not even looking for jobs at the moment. They're not

(03:44):
keen to get them because they can sort of see
how difficult it is out their job adds. You know,
new positions being advertised now down at like twenty thirteen
levels and many more people applying, so a lot of
competition out there, and of course that's incredibly difficult.

Speaker 1 (04:00):
It certainly is, Brad, Thank you very much for that
great to have you on the show. Brad Olsen, Infametrix
principal economists.

Speaker 2 (04:05):
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