The ANZ-Roy Morgan Research consumer confidence index bounced hard in the week ended 6 December, jumping by 3.5 points to 116.3, almost fully recovering the prior three week’s of falls (see next chart).
Consumer confidence is now tracking above the long run average of around 113 points.
The bounce was broad-based, with all five survey sub-indices rising.
Felicity Emmett, co-head of Australian economic at the ANZ, pinned the rise in confidence to the jump in September quarter GDP:
Signs of a downward trend in confidence over the past few weeks have been reversed with this week’s bounce. More positive news flow around the economy may have lifted overall confidence with both retail trade and the official numbers on GDP growth showing the Australian economy growing at a better-than-expected rate.
It is also possible that consumers are also starting to feel more optimistic as we enter the Christmas season. While it is now above its long run average (3.2%), it will be important for confidence to remain elevated to help support consumer spending in the crucial Christmas shopping period.
No mention by Ms Emmett of the sharp fall in national income and domestic demand, however.
Nevertheless, the below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index:
The release of the Westpac-Melbourne Institute’s consumer sentiment report to be released next week will provide more colour on the direction of consumer confidence.
