The ANZ-Roy Morgan Research (RMR) consumer confidence index has tanked, slumping 2.6 points to 109.7 in the week ended 5 April to be tracking well below the long-run average of 113. It was the lowest reading for 8 months (see next chart).
The sharp fall in confidence was driven by worries about household finances and job security, with the usually bullish ANZ chief economist, Warren Hogan, admitting that consumer confidence is likely to be bumpy in the year ahead because of weak employment growth:
“A key question for the outlook, therefore, is the extent to which a soft labour market will offset the feel good factor from higher asset prices”…
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index:
As you can see, both are stuck at low levels, with the housing bubble supposedly being the only thing supporting confidence.
The poll was taken over the weekend so is probably picking up the iron ore crash. Next week’s will absorb yesterday’s RBA decision which will be interesting.
