The sunshine is slowly returning to the consumer outlook according to the ANZ and Roy Morgan, which this morning released its latest weekly consumer confidence index which rose 0.7% to 113.7.
The ANZ said that after the early volatility around the budget “the stabilisation in confidence over most of August and September around its long-run average is encouraging for the outlook for household spending.”
Interestingly though consumers remain worried about the outlook on a 1- and 5-year basis with those sub-indices falling 1% and 6.3% last week but the key driver of the improvement was the solid drive higher in perceptions of consumers financial situation against a year ago (+3.8%) and on the time to buy a “major household item” which ripped 4.7% higher.
Consumer sentiment is solid back at the long run average but based on the answers highlighted its a still uncertain time for Australian households.
ANZ Chief Economist Warren Hogan remained upbeat saying that the ANZ is still confident that “household spending will grow moderately this year.”
Key to the outlook according to Hogan is the trade off between the wealth effect of higher home prices and the more subdued wages growth.