New Zealand Retail Sales shrank more than economists forecast, falling -1.1% in January to disappoint calls for a more modest -0.1% decline. Motor vehicle sales saw the largest decline, slipping -11.0% from the previous month. In annualized terms, receipts fell -3.96% from -2.81% in the year to December. Coupled with a -17.6% drop in house sales in the year to February, today’s metric suggests a deep aversion to commit to big-ticket purchases. This is arguably the most accurate gauge of consumer sentiment, reflecting uncertainty about future income and a lack of access to lending. Indeed, private sector credit has been shrinking at an annual pace of 4.12% since peaking October 2008 while the unemployment rate has risen to a 5-year high at 5.6%. Private spending is the largest component of overall GDP and the persistence of barriers to sustained improvement in visible (as opposed to stated, as in survey data) consumer confidence suggests deepening recession lies ahead.