Roy Morgan/ANZ consumer confidence hit again

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No rebound in sight yet:

ScreenHunter_2584 May. 27 11.10

Consumer confidence fell a further 1.1% to 99.3 in the week ending 25 May. Confidence is now down 15% over the past five weeks when various Budget policies first made news headlines. While the decline was relatively more modest compared to previous weeks, confidence has now dipped below 100 – the ‘neutral line’ – for the first time since May 2009.

  • Respondents’ perceptions of ‘economic conditions next year’ fell a sharp 6.2%, while moves across all other subindices were relatively modest. For example, perceptions of ‘financial situation compared to a year ago’ which is most correlated with households’ spending growth rose 1% last week. After having fallen relatively sharply over the past two months, however, this series continues to suggest consumer spending could soften in the near term.
  • At this stage, ANZ’s bottom line for the household consumption outlook remains that consumer spending will improve this year, although the confidence impacts from the Budget may weigh on the speed of that recovery.

Here’s how the Roy Morgan/ANZ measure of consumer confidence is tracking against Westpac’s monthly gauge, which also fell heavily last week:

ScreenHunter_2585 May. 27 11.11

Houston, we have a problem.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.