The ANZ-Roy Morgan weekly consumer confidence index has fallen another 1.7% to 109.8 in the past week.
That’s the lowest level since early August and 3 full points below the long-run average of 112.8.
The ANZ said the outlook for the future is weighing on consumers with, “concerns about job security, weak wages growth, and the economic outlook… outweighing the boost from the recent interest rate cut, lower petrol prices, and rising asset values.”
That’s a very different standpoint to the big spike we saw in the monthly Westpac consumer sentiment index. But it’s worth remembering that Westpac rose from well below average levels of confidence to long run average confidence levels.
So the two indices are not telling us starkly different stories.
Rather, as ANZ Chief Economist Warren Hogan highlights, confidence has remained fragile over the last year.
While we expect some bounce in coming months from lower interest rates, the question we increasingly debate is whether there can be a strong and sustained bounce in consumer confidence without an improvement in the labour market and a lift in wages growth.
The good news is employment is growing. But the population is growing faster so unemployment is rising and wages are flat.
That suggests another year of fragile confidence.