- ANZ’s Australian consumer confidence index fell for the second straight week, despite a recovery in the stock market.
- ANZ is concerned about the deterioration in views towards household finances.
- Despite the recent falls, the index remains above its long-term average.
Australian consumer confidence fell for the second straight week, as sentiment dimmed towards both household finances and the broader economy.
The ANZ-Roy Morgan consumer confidence index fell by 3.5% to 115.6 — following a 2.6% drop last week.
ANZ’s head of Australian Economics, David Plank, said concerns still lingered among Australian households in the fallout from the previous week’s global stock selloff.
He also attributed part of the poor result to increased tension in Federal parliament surrounding the Barnaby Joyce affair.
Views towards economic conditions over the next 12 months slumped by another 5.5% after last week’s 6% fall, leaving the measure at an eight-week low of 107.
And there was an even sharper 8.8% fall in sentiment towards economic prospects over the next five years.
That was despite a steady week of trade for the local stock market, and last Thursday’s employment report which extended Australia’s record run of jobs growth.
But it was views towards household finances that most concerned Plank.
The reading for current household financial conditions fell by another 1.6%, after last week’s stock market jitters caused a 2.6% fall.
Views towards the outlook for finances over the next five years also fell for the second straight week.
“The deterioration in views towards financial conditions, particularly current conditions, is a little worrying,” Plank said.
“In the last few weeks, views towards current conditions have retraced about half of their gains since their recent low point in mid-2017.”
It means tomorrow’s wage data for the December quarter is shaping up as particularly important for the near-term outlook of Australian consumer sentiment.
That’s especially true in the wake of the latest weekly housing data from CoreLogic, which showed that Australian house prices continue to fall.
The longer-term trend still reveals a broad pick-up in consumer confidence in the second half of last year, helped by strength in the labour market and an increasingly positive global growth picture.
That means the current reading is still above the long-term average of 112.9.
“Given the strong gain in consumer sentiment it was probably inevitable that at some point we were going to see a reasonable correction,” Plank said.
“Importantly, however, even after the losses of the past couple of weeks consumer sentiment is still relatively elevated. And most sub-indices remain above their long-run averages.”