Out of the blue, Australian consumer confidence surged last week, particularly when it comes to how people think about household finances.
The ANZ-Roy Morgan consumer confidence jumped by an enormous 4.4%, more than offsetting the decline registered in the previous week.
It left the index sitting at 120.6, well above its long-run average of 112.8. While the index has been incredibly volatile in recent months, it now sits at the second-highest level seen since late 2014.
“There was little economic news or developments to drive the bounce in confidence,” said Jo Masters, senior economist at ANZ.
“Concerns around financial market volatility likely waned as equity markets rallied off their recent lows. More broadly, domestic factors remain positive, notably the strong GDP reading, high auction clearance rates and ongoing improvement in labour market conditions.”
Steeping back from the volatility, Masters’ notes that “confidence has been trending higher since early 2016 and is now well above its long run average”.
Volatile yet encouraging, you might say.
Like the gain in the headline index, all five of the survey’s sub-components rose solidly during the week.
“Consumers’ views towards their current finances jumped 5.4%, while views towards future finances rose a solid 4.0%,” said Masters. “Encouragingly, the indicator on current finances is at a post-GFC high.”
That improvement was mirrored by sentiment towards the economy, both near and longer-term.
“Views of the 12-month economic outlook rose a sharp 6.0%, while views of the 5-year economic outlook improved by 3.6%,” she said.
The final component — whether now was a good time to buy a major household item — also chimed in, rising 3.8% after a 4.1% decline seen previously.
“Overall, Australian households remain upbeat about their personal finances and more optimistic about the economy, especially in the near term,” said Masters.
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