The ANZ – Roy Morgan Weekly Consumer Confidence index is out this morning and it brings disappointing news for the economy with a fall of 2.3% last week.
This takes it to its lowest level in 8 months and reinforces what now looks like a mild down trend from last year according to the ANZ.
The ANZ said that:
the weakness last week was broadly based with four out of the five subindices declining. The largest fall was in ‘time to buy a major household item’ which dropped 4.6% to the lowest level since June 2014, around the time of the Commonwealth Budget.
There was also weakness across the forward looking subindices. Confidence in household
finances next year (-2.8%), the economic outlook over the next year (-2.9%) and five
years (-1.3%) were all down. In particular, confidence in the economic outlook remains at
ANZ Chief economist Warren Hogan hit on the conundrum though noting that the “strength in retail sales over January-February is surprising in light of continuing lacklustre consumer confidence.”
That’s something he says that might have its basis in ongoing fear of job losses.
“A key question for the outlook therefore is the extent to which a soft labour market will offset the ‘feel good’ factor from higher asset prices. In our view, these conflicting forces suggest the road for confidence and retail over the next year may be bumpy,” Hogan says.
Indeed. This release is also another reminder of how important the Budget is going to be in framing the outlook for confidence and growth in th second half of 2015.