ANZ-Roy Morgan Australian Consumer Confidence edged 0.5% lower last week, down for the second week in a row. The sub-indicators continue to show volatility.
After a sharp drop the previous week, households’ views around current financial conditions were largely unchanged (down 0.2%), while views towards future conditions fell 1.7%, following four consecutive weeks of gains.
Households’ confidence in future economic conditions ticked 0.4% lower last week; while expectations of current economic conditions edged 2.4% higher, up for the second consecutive week.
The ‘time to buy a major household item’ sub-index fell 1.8% last week but remains elevated in level terms.
Inflation expectations remain unchanged at 4.2% on a four-week moving average basis.
ANZ’S SENIOR ECONOMIST, FELICITY EMMETT, COMMENTED:
“After trending down for nearly a year, confidence looks to be stabilising at a lower level. Last week’s move leaves it just below its long run average, where it has been hovering for the last couple of months.
Persistently weak wage growth amidst high household debt and hits to household budgets from rising energy costs are all factors that are weighing on confidence. That said, concerns over these issues look to have been at least partly offset by the recent good news on the labour market and, in particular, the fall in the unemployment rate to a four-year low.
The labour and housing markets will likely continue to be important influences on confidence. Any further improvement in the unemployment rate would be positive, although the recent softness in the housing market suggests that it will not provide significant support for confidence over the near term.”