Consumer confidence highest since January

ScreenHunter_15 Mar. 18 16.24

By Leith van Onselen

The ANZ-Roy Morgan Research (RMR) consumer confidence index has more than recovered from its Budget-induced slump, rising another 2.7 points in the week ended 27 July to 116.2, and is now at its highest level since late-January and some 2.7% above its long-run average reading of 113.2 (see next chart).

ScreenHunter_3513 Jul. 29 11.01

According to ANZ chief economist, Warren Hogan:

While the improvement in confidence was relatively broadly based last week, households’ perceptions about ‘financial situation compared to a year ago’, a subindex most closely correlated with consumer demand, has now returned to levels seen before the budget.

The below chart, which plots the most recent Westpac-Melbourne Institute’s Consumer Sentiment index against the ANZ-RM Consumer Confidence index, highlights the mood of the Australian consumer more clearly:

ScreenHunter_3514 Jul. 29 11.02

Expect next month’s Westpac consumer sentiment reading to record a big bounce.

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