Nov 06, 2019
November 12, 2019
Confidence reverses; back below average
The ANZ-Roy Morgan Consumer Confidence index made a U-turn last week, falling 2.1%. All the subindices were in the negative, except future economic conditions.
After two weeks of strength, the financial conditions subindices faltered. Current finances fell 3.2%, while future finances declined 1.6%.
Economic conditions subindices were mixed, with current economic conditions declining 1.6%, while future economic conditions rose a marginal 0.3%.
The ‘time to buy a household item’ continued with its see-saw pattern, falling 3.9% after a gain of 1.3% last week. The four-week moving average of inflation expectations (IE) remained stable at 4.0%, though the weekly reading saw an increase to back above 4%.
ANZ Head of Australian Economics, David Plank, commented:
The fall in consumer confidence was a bit disappointing amidst strengthening global macroeconomic conditions and some reasonable domestic news in the form of a huge trade surplus and continued good news on housing.
These data points were clearly not enough to offset a fall in the volume of retail sales for the September quarter, the first drop in annual retail volumes since the early 1990s recession, and a soft ANZ job ads.
The defining feature of the survey remains the divergence between financial and economic conditions. The RBA will be pleased to see an up-tick in inflation expectations.