Falling petrol prices and the usual Christmas cheer have failed to lift consumer confidence which rose just 0.3% last week to 112 according to this morning’s release of the the Weekly ANZ/Roy Morgan Weekly Consumer Confidence Index.
The index level of 112 is still below the long-run average and ANZ Chief Economist Warren Hogan expressed his disappointment of the lack of a bounce in confidence from petrol’s fall noting:
Subdued levels of confidence, combined with soft retail sales in November and mixed anecdotes about December sales, suggest that households may be saving rather than spending the real income boost from lower petrol prices.
The breakdown in what would be considered a strong relationship between lower petrol prices and a lift in consumer confidence highlights the enduring negativity that grips Australian consumers and households.
Hogan believes that the employment market is both the cause and fix for this negativity.
He said that, “We expect a turnaround in the labour market is the key to an improvement in confidence.” At the same time, however Hogan highlighted the message in yesterday’s ANZ Job Ads Series which Hogan said suggested “an unusually high level of job losses which would likely be weighing on confidence.”
Employment uncertainty has fed Australian consumer fears about the future and is driving the continuation on their focus on saving not spending the windfall gains from petrol prices at their lowest levels in around a decade.
Thursday’s December jobs number will be crucial for confidence and the economy.