Consumer confidence: consumer sentiment continues to trend higher

• ANZ-Roy Morgan Australian Consumer Confidence continues to trend higher, rising by 0.8% last week.
• In contrast to last week’s reading, financial conditions indices were up significantly. Current financial conditions jumped by 7.2% while future financial condition rose by 2.3%.
• Providing some offset for this, economic conditions subindices were lower. Current and future economic conditions fell by 2.5% and 0.3% respectively.
• The ‘time to buy a household item’ sub-index was down by 1.9%. Fourweek moving average inflation expectations appear to have stabilised at 4.2%.

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ANZ Senior Economist, Felicity Emmett, commented:

“Consumer confidence continues to improve, rising 0.8% last week. The resilience of sentiment is encouraging given ongoing weakness in house prices. In our view this strength is being supported by the strong labour market. The recent fall in petrol prices is also probably helping to buttress confidence.

This week’s GDP and retail sales reports will reveal whether elevated consumer confidence has translated into strength in actual consumer spending. These indicators will be important to watch over coming months to determine if and how the downturn in house prices is feeding through into the real economy.”

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