ANZ-Roy Morgan Australian Consumer Confidence rose 3.9% last week, after three straight weekly falls. Sentiment rose across the board, with views towards personal finances showing a particularly solid improvement.
Households’ views towards current financial conditions bounced 4.7% last week, more than reversing the 4.1% fall over the previous two weeks, and bringing the index to an 11-week high. Similarly, sentiment around future financial conditions rose a solid 6.4%, following a 5.3% decline in the previous week. While sentiment towards current financial conditions remains elevated in level terms, views towards future financial conditions remain below the long term average.
Consumers’ views towards current and future economic conditions rose 5.6% and 2.2% respectively last week. Despite these gains views toward both current and future economic conditions are well below long run averages.
Inflation expectations remained at 4.5% on a four-week moving average basis. Inflation expectations have increased from their low point in July, perhaps motivated by higher energy costs.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED:
“While last week’s improvement in confidence is encouraging, volatility in weekly responses makes it difficult to ascertain the underlying momentum. Broadly, confidence has slipped in August, weighed down by concerns around disappointing wage growth and higher energy costs. Views towards economic conditions have fallen significantly and appear to be returning to levels seen in May and June. In contrast, consumers remain relatively optimistic about their personal finances – at least in the near term.
In our view, despite a strong labour market and moderate economic activity, any improvement in confidence is likely to remain capped until households experience a material acceleration in wage growth, which seems unlikely anytime soon.”