The latest ANZ-Roy Morgan Consumer Confidence Index fell 0.4 per cent to 112.5 points for the week to July 16, after falling 1.3 per cent the week before.
The biggest drag was a 1.8 per cent slump in households’ optimism towards their current financial situation following two straight weekly rises.
ANZ head of Australian economics David Plank said a strong employment report on Thursday had the potential lift confidence but, in the meantime, there has been no boost to sentiment.
“The recovery in confidence seen over June, likely due to the improvement in labour market conditions, appears to have ended,” he said.
“We expect confidence to tread water around the current level in the near term, barring any major developments.”
He said he expects the June employment report to show an above consensus increase in jobs, but believes growth won’t be as strong as it has been in the past three months.
“If jobs growth continues at the pace seen in recent months, it has the potential not only to boost confidence but perhaps also challenge our view on the stable course for monetary policy in 2018,” he said.