Household saving up as households spend less

Household saving increased to $2.1 billion in the June quarter after dropping to $230 million in the first quarter of 2022, Stats NZ said today.

“New Zealand households spent less in the June 2022 quarter, while also experiencing steady income growth. The decrease in household spending partly reflected reduced purchases of durable goods, such as second-hand cars and electronics,” national accounts institutional sector insights senior manager Paul Pascoe said.

In the June quarter household incomes grew 1.6 percent to $54.9 billion. Wage and salary increases were the largest factor contributing to income growth. However, increased government assistance (such as benefits and tax credits), and income of self-employed business owners and partnerships also contributed.

Household saving is the difference between income and spending.

Household saving has fluctuated in recent quarters as a result of economic volatility in a period affected by COVID-19 disruption, international supply-chain pressures, and other factors. While household incomes have remained relatively steady, household expenditure has moved up and down as consumption behaviour has changed in response to rapidly changing economic conditions, resulting in larger movements in household saving in recent quarters.