Fuel inflates card transactions

Consumers put more on the plastic last month than in January, but when petrol sales are excluded the declining trend of recent months continued.

Statistics New Zealand's tally of retail electronic card transactions, which includes credit and debit cards, rose a seasonally adjusted 0.5 per cent last month, the first increase since October.

But petrol prices climbed last month and when the automotive sector is excluded, core retail transactions were down 0.4 per cent.

They were 0.7 per cent lower than in February last year, but that was a leap year and February included an extra trading day.

After "waterfall declines" from late 2007 to mid-2008 the pace of weakening had declined a little, Goldman Sachs JBWere economist Shamubeel Eaqub said. But the outlook remained challenging.

While falling interest rates would reduce the mortgage burden by about $1.6 billion this year and tax cuts would boost incomes by some $2.1 billion, Eaqub said, the outlook for job losses and rising household savings rates would be critical in shaping any recovery.