The January fall in spending was widespread.<\/p>\n
Grocery food spending was down 0.9%, as was spending on fuel (down 3.7%, reflecting the fall in fuel prices over the month).<\/p>\n
\u201cNotably, spending in discretionary areas was also down, with purchases of furnishings and other household durables down 1.7% and hospitality spending down 2.1%,\u201d Ranchhod said.<\/p>\n
ASB economist Kim Mundy suggested the wetter-than-usual weather may have had an impact on spending levels.<\/p>\n
\u201cWe had expected a decline given the severity of the weather that impacted multiple regions during the month,\u201d she said.<\/p>\n
\u201cConsumables and durables were also weak and extended declines in December,\u201d Mundy said.<\/p>\n
\u201cIt\u2019s likely that the weather impacted spending in these categories, too.\u201d<\/p>\n
Elsewhere, fuel spending fell 3.7% over the month, helped in part by a fall of about 2% in fuel prices in January. <\/p>\n
Stepping back and taking a longer-term perspective, compared to the same time last year, spending in core categories (excluding fuel) was up 1.1%, Ranchhod said.<\/p>\n
In actual terms, cardholders made 177 million transactions across all industries in January 2026, with an average value of $55 per transaction. The total amount spent using electronic cards was $9.8 billion.<\/p>\n
Looking to the year ahead, the pieces were still in place for a pick-up in household spending, though it might be gradual in the near term, Ranchhod said.<\/p>\n
\u201cAverage borrowing costs are still dropping as many borrowers continue to roll off earlier higher mortgage rates and on to lower ones,\u201d he said.<\/p>\n
\u201cExport commodity earnings remain firm, boosting incomes in many parts of the country.\u201d<\/p>\n
Consumer confidence was also on the rise. Fuel prices had fallen and population growth looked like it had reached a low, he said. <\/p>\n
\u201cBut while there are a range of factors that will help to support spending over the coming year, we\u2019ve continued to see softness in the labour market, with unemployment rising to 5.4% over the past year.\u201d<\/p>\n
The related softness in disposable income growth was likely to remain a drag on spending for a while yet, Ranchhod said.<\/p>\n
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.<\/p>\n