The ANZ-Roy Morgan Research consumer confidence index continues to retrace its post-Budget bounce, falling a further 1.4 points to 112.1 in the week ended 7 June, to be tracking below the long-run average of 112.7 (see next chart).
Commenting on the result, ANZ chief economist, Warren Hogan, noted that confidence is likely to remain in the doldrums:
Consumer confidence fell last week to levels just below long-run average. It’s disappointing to see the boost that consumer confidence saw around the time of the Budget start to be unwound. As we have noted previously, the lift to confidence needs to be sustained to feed into stronger household spending. Last week’s Q1 GDP report showed that growth in consumer spending remains soft, with weak growth in household incomes weighing on spending. April retail sales were also disappointing. Ongoing soft growth in wages is likely to remain a constraint on spending, even with a lower saving rate. And if confidence proves unable to sustain the recent bounce, growth in consumer spending looks set to stay in the doldrums.
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index:
The Budget bounce looks to have been short-lived.
