Australians couldn’t care less that Donald Trump has been elected as the next president of the United States, at least at this point.
The ANZ-Roy Morgan consumer confidence index rose by 0.3% last week, leaving it sitting at 118.2, well above its long-run average of 112.8.
Crucially, the survey was conducted in the immediate aftermath of the US election result, providing as close to a real-time snapshot on the impact on household confidence.
Thankfully, there was none.
“It is encouraging to see consumer confidence steady in the face of the surprise US election outcome,” said Jo Masters, senior economist at ANZ.
“This is in contrast to Brexit, where consumer confidence fell 1.7% in the week following that outcome.
“This likely reflects the fact that financial markets settled after Trump’s acceptance speech, with many markets reversing earlier losses and volatility subsiding rapidly,” she says.
However, while households haven’t thrown the proverbial toys out of the pram just yet, Masters says that there’s plenty of scope for that to change as we head towards Donald Trump’s presidential inauguration in late January.
“Newsflow is likely to remain dominated by President-elect Trump in the coming weeks as a clearer picture of the new administration’s policy platform emerges,” she says.
“As such, there remains the potential for bouts of financial market volatility and a consequent impact on confidence.”
Domestically, Masters says that confidence remains supported by a “solid domestic economy”, although she’ll be paying close attention to upcoming Australian wage and labour market data — arriving on Wednesday and Thursday respectively — given it’s likely to be influential on confidence levels in the near-term.
Looking at the performance of the survey’s five subindices, Masters says that all of the improvement came courtesy of improved sentiment towards the economic outlook.
“Households’ views on economic conditions over the next 12 months improved 1.2%, while views towards economic conditions over the next 5 years rose a solid 3.5%,” she said.
Despite the weakness registered last week, both subindices remain well above their historic averages.
Households’ views towards their finances compared to a year ago fell 0.8% while that looking one year ahead dipped by a larger 1.2%.
The final component of the survey — whether now is a good time to buy a household item — fell by 0.7%, providing some caution on the outlook for Christmas spending.
In the separate Westpac-MI consumer sentiment survey released last week, a higher number of respondents indicated that they planned to reduce spending this year compared to the levels of a year ago.