ANZ-Roy Morgan Australian Consumer Confidence rose 1.4% last week to 116.4, its highest level in 16 weeks. The details were broadly positive, with three out of five sub-indices posting gains, while the other two showed only slight falls.
Households’ views towards both current and future economic conditions were up 2.9% and 2.0% respectively, following a solid 3.5% and 7.0% increase previously. Both subindices sit at multi-week highs.
Household views toward the state of their current finances slipped for the third consecutive week (-0.4%). Even so, current conditions remain well above their long term average. Encouragingly, their views towards future conditions jumped 3.0% last week, the first increase in four weeks.
Inflation expectations remain unchanged at 4.5% in four-week moving average terms.
ANZ SENIOR ECONOMIST FELICITY EMMETT, COMMENTED
“Sentiment has improved considerably over the past two weeks, driven primarily by an upswing in views towards current and future economic conditions. This improvement likely reflects ongoing labour market strength, with the most recent jobs report showing a decline in the unemployment rate to multi-year low of 5.4%. In addition, the success of the ‘Yes’ vote in the marriage equality plebiscite, may have provided a boost to confidence.
The outlook for employment in the near term remains positive, consistent with elevated business conditions and leading labour market indicators, and this should continue to broadly support confidence. However, last week’s weaker-than-expected wage growth is likely to weigh on consumers, particularly in the current environment of moderating house price growth and high household debt. Together, these factors are likely to cap the extent of improvement in sentiment.”