ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED
“Disappointingly, confidence was unable to hold on to its previous gain. Last week’s positive surprise on retail sales may have been outweighed by news of the decline in house prices and slowing housing credit. The drop means the recent sawtooth pattern in confidence continues. But looking through this recent pattern, confidence has generally been rising since April. The strong Q2 retail sales print was consistent with this rise in consumer confidence.
Given the fall in house prices, high levels of household debt and an already low savings rate future consumption growth is likely to depend heavily on wage growth. On this front, we look to the WPI print out on 15 August, to provide some comfort that wages growth is past its bottom and will gradually move up.”
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