The ANZ-Roy Morgan Weekly Consumer Confidence index has just been released showing a continued recovery in overall confidence of 2.4% over the past week.
This means that confidence has now recovered 6% in the past four weeks but the ANZ says it is still 10% below the level seen at the end of April.
While the recovery in confidence is encouraging, the ANZ says:
The pace of recovery and the level that confidence eventually settles at will be important factors in determining the likely impact on consumer spending.
The ANZ is watching closely to see whether the big fall in confidence “proves transitory”. They believe it will and expect a further 3-5% gain in the weeks ahead.
But they also highlight a terrifying reality for retailers if the sub-index in the confidence numbers – financial situation compared to a year ago – doesn’t also recover soon.
While the ANZ believes household spending will recover, this is just more evidence that the economic headwinds faced by the economy are strong at present.