ANZ-Roy Morgan Australian Consumer Confidence showed little change (0.1%) last week, after a 0.8% rise in the previous week. The steady headline result masks some variation between the sub-indices.
The outlook on economic conditions next year fell 4.5% last week, more than entirely unwinding the previous 4.3% rise and bringing the sub-index to its lowest value in seven weeks. Consumers were also less optimistic about future economic conditions. This sub- index slipped 1.5% last week, partially reversing the 3.5% increase the previous week.
In contrast, views about current financial conditions rose a solid 5.3% to 108.4, the highest value since mid-June. The outlook for future financial conditions fell by 1.9%, following a 0.9% fall the previous week. Both sub-indices remain above their long term averages.
The ‘time to buy a major household item’ index rose 3.0% reversing the decline over the previous two weeks. Even so, this sub-index remains below its long term average.
Inflation expectations remained stable at 4.5% for the fourth consecutive week.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED
“The headline number showed little change last week as confidence remains close to its long term average. While concerns around subdued wage growth continue to weigh on the consumer, ongoing strength in the labour market likely provides some offset. Rising political uncertainty may explain the rise in pessimism about the economic outlook, though consumers don’t seem to see this uncertainty impacting their finances directly.
We will be closely watching the September retail sales number out later this week, with our expectation being that it will effectively reverse the fall in August. For the September quarter as a whole we think retail sales volumes will have only posted a small rise; reflecting, among other things, limited wage gains, slower house price growth and the stress on household budgets from the recent jump in energy prices.”