The ANZ-Roy Morgan Research (RMR) consumer confidence index fell in the week ended 19 October, falling 2.2 points (-1.9%%) to 111.6, taking it below its long-run average reading of 113.2 (see next chart).
The overall fall in consumer confidence was driven by households having a more pessimistic take on their financial situation compared with the previous year and also being more downbeat about the economic outlook for the next five years.
ANZ chief economist, Warren Hogan, continues to summon the confidence fairy and wealth effect from rising housing prices, even though wages are falling in real (inflation-adjusted) terms. In the release, Hogan claimed rising house prices were lifting people’s spirits:
“Consumer confidence remains broadly stable with house price gains likely providing some offset to concerns related to recent sharemarket losses and volatility on global financial markets”…
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the ANZ-RM Consumer Confidence index, which shows some divergence recently:
