Consumer confidence is down, reversing the gains made last weeks, according to the ANZ and Roy Morgan’s latest Australian consumer confidence report.
The report noted a ‘saw tooth pattern’ in consumer confidence with the latest reading down 0.8 per cent to 118.9 points, slightly below the four-week average of 119.8.
“Disappointingly, confidence was unable to hold on to its previous gain,” said David Plank, ANZ head of Australian economics.
“Last week’s positive surprise on retail sales may have been outweighed by news of the decline in house prices and slowing housing credit. The drop means the recent sawtooth pattern in confidence continues.”
Plank notes that, looking through the recent pattern, confidence has generally been rising since April, with strong Q2 retail sales consistent with this rise in consumer confidence.
“Given the fall in house prices, high levels of household debt and an already low savings rate future consumption growth is likely to depend heavily on wage growth. On this front, we look to the WPI print out on 15 August, to provide some comfort that wages growth is past its bottom and will gradually move up,” said Plank.
Despite the drop in consumer confidence, households’ optimism toward current financial conditions improved 0.5 per cent, while thoughts on future financial conditions dropped 1.3 per cent.
The ‘time to buy a household item’ subindex fell 1.7 per cent, its third consecutive weekly decline, to reach its lowest point in 16 weeks.
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