Consumer confidence: consolidating confidence
ANZ-Roy Morgan Australian Consumer Confidence weakened slightly (-0.7%) over the week to 122.1, a solid performance following the large 5.6% jump the previous week and leaving the index comfortably above its long term average. The details were mixed, with two out of the five subindices posting positive readings.
ANZ’S SENIOR ECONOMIST, JO MASTERS, COMMENTED:
“It is encouraging to see consumer confidence consolidate the large bounce recorded the previous week. The rise this week largely reflected improved sentiment toward future financial conditions, which may reflect the drop in the unemployment rate, to 5.4%, recorded in the May data last week.
Views about the economy didn’t fare as well. Geopolitical tensions are likely to have contributed to sentiment about current economic conditions, while views on future economic conditions may also have been weighed down by ongoing concerns over the softening housing market, as well as still low wage growth, high levels of debt and a low savings rate.
Given uncertainties about trade protectionism and domestic concerns, we remain cautious about how easily upbeat confidence will be reflected in stronger consumer spending. Indeed, we continue to see a pick-up in wages as essential for a boost to overall household spending.”