Confidence shakes off post-Budget blues

• ANZ-Roy Morgan Australian Consumer Confidence has bounced back, rising 1.9% last week. This reaffirms our prognosis that the post-Budget dip in consumer confidence was likely noise.

• Current finances were up 2.1%, after three consecutive falls. Future financial conditions inched up marginally by 0.1%.

• Current economic conditions rose by 4.2%, to the highest level for this year. Future economic conditions were up by a 1.5%.

• The ‘time to buy a household item’ rose by 1.7%. Four-week moving average inflation expectations were stable at 4.0%. The weekly reading softened to 3.9%, however, reversing much of the prior week’s uptick.

ANZ Head of Australian Economics, David Plank, commented:

“The pleasing rebound in consumer confidence after the post-Budget decline suggests that the dip was noise rather than anything more serious. Some of the economic news domestically has been better of late, not least signs that the credit tightening is easing with the ANZ-Property Council survey showing a smaller deterioration in credit availability and a number of media reports about lower mortgage rates. A renewed decline in inflation expectations is a concern, however. The historic low for the 4 week moving average of 3.9% reached in November 2016 could be under threat.”