The ANZ-Roy Morgan Research (RMR) consumer confidence index has fallen sharply, down 2.2 points to 110.3 in the week ended 8 March, to be tracking below the long-run average (see next chart).
ANZ noted that the fall in confidence was likely driven by news around the long-term federal government budget outlook produced in the fourth Intergenerational Report, given the 1.7% drop in confidence in the outlook over the next year and the 5.9% fall in outlook over the next five years.
ANZ is also surprised that the “household finances over the next year” component fell by 2%, given the strong auction clearance rates and rising house prices.
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index, which have converged recently:
