ANZ-Roy Morgan Australian Consumer Confidence slipped 0.6% in the week ending 1 October.
The detail was mixed; sentiment towards economic conditions improved but this was more than offset by a fall in households’ views of their own finances.
Consumers were more optimistic about both current and future economic conditions (up 2.5% and 2.0% respectively). Views towards current economic conditions have improved since the low point in May; however sentiment towards both current and future conditions remains below long run averages.
Households’ views towards both current and future financial conditions fell 1.6% last week. Still, both sub-indices are showing some resilience and remain above their long term averages. The ‘time to buy a major household item’ index dropped 3.3% last week, entirely unwinding the previous week’s rise. On a four-week moving average basis, the subindex has been trending down since August.
Inflation expectations rose 0.1% to 4.5% on a four-week moving average basis.
ANZ SENIOR ECONOMIST, FELICITY EMMETT, COMMENTED
“The slight fall in headline confidence once again masks some underlying volatility. Stepping back from the weekly changes – confidence in financial conditions remains above its long term average, which is encouraging given the headwinds households face in terms of high debt levels, low wages growth and higher energy costs. Meanwhile, though sentiment towards overall economic conditions currently sits above its post-budget low, consumers remain uncertain about the longer term prospects.
Broadly, consumer confidence appears to be basing around its long term average, supported by ongoing strength in the labour market and a more optimistic view of financial conditions. That said, the ‘time to buy a household item’ index remains below its long term average, consistent with our view that retail sales are likely to disappoint in August, after a period of strength earlier in the year.”