New Zealand retail trade volumes fell 1.0 percent in the three months to June after a decline of 1.6 percent in the three months to March. The volume of sales fell 3.5 percent on the year after dropping 4.1 percent previously. Retail sales have now fallen on the quarter for five of the last six quarters and on the year for four of the last five quarters, largely reflecting the impact of aggressive policy tightening by the Reserve Bank of New Zealand to curb inflation pressures. Retail sales values fell 0.2 percent on the quarter after declining 0.9 percent previously, while year-over-year growth in values slowed from 4.7 percent to 2.5 percent.

The fall in headline sales volumes in the three months to June was broad-based, with nearly all categories recording declines. Food and beverage services, clothing, footwear, and accessories, and recreational goods were among the categories to record declines much bigger than the headline fall. The main exception was motor vehicles and parts, which rose 3.7 percent on the quarter after falling 2.1 percent previously.

Retail trade data tracks changes in New Zealand retail sales. As consumption contributes heavily to New Zealand's GDP, a rising retail sales figure can be indicative of rising demand and subsequent inflation. While strong economic growth is typically good for the New Zealand economy, uncontrolled growth and rising inflation may lead to instability and corrective action from New Zealand's central bank. The release was recently changed from monthly to quarterly. The headline numbers are the percentage change in retail trade from the previous quarter and the percentage change in retail trade from the previous year.

Consumer spending accounts a large portion of the economy, so if you know how consumers are behaving, your will have a good indication as to where the economy is headed. Needless to say, that is a big advantage for investors. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.