It appears the “sticker shock” from the Federal Budget may finally be wearing-off, with the weekly ANZ-Roy Morgan Research consumer confidence index recording its first rise in six weeks, lifting 2.9 points to 102.2 (see next chart).
The bounce was driven by optimism about economic conditions expected next year, partly offset by pessimism about consumers’ financial situations now compared to a year ago.
Despite the latest rise, the ANZ-RM consumer confidence index is down 12% from six weeks ago and remains 10.8% below its long-run average of 113 points.
Finally, the below chart tracks the ANZ-RM index against the monthly Westpac-Melbourne Institute consumer sentiment index, whose latest reading recorded a sharp fall:
The next few week’s data will be important as they will confirm whether the Budget slump in consumer confidence was temporary, and whether the outlook for consumer spending and housing has materially worsened.
