The ANZ-Roy Morgan Research (RMR) consumer confidence index fell by 0.4 points (-0.35%) in the week ended 25 January 113.2, to be tracking in line with the long-run average (see next chart).
In light of the lacklustre consumer mood, which has drifted sideways for five months, ANZ chief economist is now calling on the RBA to cut interest rates to boost sentiment:
“It appears that the impetus from continuing asset price gains and lower petrol prices is being outweighed by concerns about job security, weak wages growth, a lower Australian dollar and concerns about the federal government budget”.
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index, which registered a modest rise last week, against the latest ANZ-RM Consumer Confidence index. Note the historically large divergence between the two measures, with Westpac reporting that pessimists continue to easily outweigh optimists:
It’s worth also noting that consumer confidence is down 3%/10% from the same time last year according to ANZ-RM and Westpac.