ANZ-Roy Morgan Consumer Confidence rose a further 0.6% to 112.5 this week. This follows a rise of 4.5% last week driven by easing concerns around the Greece debt crisis and China stock market volatility. Despite this bounce, levels remain subdued and are down 3.2% compared to this time last year.
- Consumers’ improving perception of their personal finances both now (2.0%) and in a year’s time (1.1%) drove the increase. Easing confidence in the economic outlook over the short (-1.4%) and medium term (-0.5%) provided a partial offset.
- Taking a longer-term view, consumers’ views towards their own finances have been relatively stable over the past few quarters, whereas confidence in the economic outlook have been on a downward trend (Figure 3).
ANZ Chief Economist Warren Hogan commented:
“The fact that confidence has held the previous week’s bounce is a positive sign that confidence could continue to recover in coming weeks in the absence of further market volatility. More broadly, consumers continue to hold a more positive view towards their financial situation, relative to economic conditions. The minutes from the July RBA meeting pointed out that more positive views on personal finances likely reflect low interest rates and high household wealth. However, households’ confidence in their finances is not translating into the same strength in consumer spending as seen in previous cycles (Figure 3). This is likely to be driven by weak wages growth and consumers continuing to pay down debt. As such, consumer spending is likely to remain below trend and a key impediment to a lift in economic growth.”