Consumer confidence retains momentum

The ANZ-Roy Morgan Australian Consumer Confidence rose 0.8 per cent last week, continuing the upward momentum of the previous period. The gain was led by a lift in sentiment surrounding economic conditions – both for the next year and the long term.

Current finances gained 1 per cent, while future financial conditions fell 3.9 per cent and, in contrast to current finances, are below average.

Current economic conditions revived from its lowest point in four years, gaining 3.9 per cent. Future economic conditions also strengthened and gained 2.7 per cent. Both remain well below average.

The ‘time to buy a major household item’ index gained 1.9 per cent, building on last week’s stellar gain of 5.3 per cent. It remains well below its long-run average, however.

The four-week moving average of inflation expectations was down 0.1 percentage points to 3.9 per cent, as the weekly reading softened to 3.9 per cent from 4.1 per cent.

“It is encouraging to see a second week of positive momentum in consumer confidence,” ANZ Head of Australian Economics David Plank said. “Especially given the slew of negative news over the past week: weaker than expected GDP, soft retail sales, bush fires and the smoke haze in Sydney and much of New South Wales.”

“It is possible the RBA’s positive outlook supported sentiment. Continued gains in house prices may also be supporting sentiment.”

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