The ANZ-Roy Morgan Australian Consumer Confidence bounced back from last week’s decline, rising 0.8% on a weekly basis to 113.3. This takes the index back above its long- term average. The gain was driven by improvements in expectations for the near- and long- term economic outlook.
The outlook on economic conditions over the coming year improved by 4.3% from the previous week to 103.5, the highest since July, and above the long-term average for the first time in two months. Expectations about economic conditions in the next five years rose 3.5%.
Consumers’ views about current financial conditions fell for a second consecutive week, bringing the index value close to the long-term average. The outlook for future financial conditions fell marginally by 0.9% after two consecutive positive readings in the prior weeks. The ‘time to buy a major household item’ index remained unchanged at 129.
Inflation expectations remained stable, at 4.5% for the third consecutive week.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED
“Another strong employment report seems to have lifted the mood for consumers this week. Employment was up close to 20k in September, with the unemployment rate dropping to 5.5%, its lowest level in four years. Employment has now risen for 12 successive months, the longest run since 1994. The ongoing reduction in spare capacity in the labour market offers the prospect of higher wages in time, adding to the upward impetus provided by the Q3 lift in the minimum wage.
Continued improvement in the labour market and an eventual acceleration in wage growth is likely the key to a clear uptrend in consumer confidence. We think that there has been a little bit of overshoot in the official employment figures recently, so there may be a risk of some weaker employment numbers for a month or two that could stall any uptrend in confidence. We think, however, that any such weakness will prove to be temporary.”