ANZ-Roy Morgan Australian Consumer Confidence recovered some of the previous week’s losses, rising 0.4% to 113.8 in the week ending 8 October. Sentiment towards economic conditions fell slightly, but views on financial conditions improved.
Consumers’ views towards current as well as future financial conditions improved, with the indices increasing by 0.7% and 0.3% respectively. The ‘time to buy a major household item’ index reversed course post last week’s slump, and rose by 1.8% to end up close to its long term average.
After a strong show in the previous week, households’ views on economic conditions edged lower. Both the indices recorded a slight decline, and remain well below their long run averages.
Inflation expectations remained unchanged at 4.5% on a four-week moving average basis.
ANZ SENIOR ECONOMIST, FELICITY EMMETT, COMMENTED
“The latest weekly consumer confidence release leaves confidence close to its long run trend. Consumers are clearly under pressure, though, as evidenced in the very weak retail sales result for August. While the extent of the weakness was a surprise, it occurred alongside a soft spot for confidence in the month, which we expect was in response to higher electricity prices, higher petrol prices and slowing house price growth.
Since August, consumer confidence has strengthened somewhat. Strong jobs growth is clearly supporting household views about financial conditions. The labour market should continue to improve, with the outlook supported by the better investment outlook, both on the private side and the public infrastructure side, as well as elevated business conditions.
We continue to see confidence being weighed down by the combination of high household debt and low wage growth. Ongoing improvement in the labour market and a corresponding increase in wage growth remain the keys to a material uptrend in confidence.”