The ANZ-Roy Morgan Research consumer confidence index fell in the week ended 21 June, falling 0.5 points to be tracking just above its long-run average (see next chart).
Commenting on the result, ANZ chief economist, Warren Hogan, believes that without a sustained uplift in confidence, there will be no rise in household spending:
“Consumer expectations of the outlook remain subdued. We expect this is due at least in part to concerns about future income and employment growth. This uncertainty may be feeding into more cautious consumer behaviour which is evident in ongoing high rates of mortgage repayments. Reduced willingness to increase debt is likely to be reducing the efficacy of monetary policy and contributing to softer consumption growth. As such, a sustained lift in expectations is crucial to building consumer confidence, which will encourage an improvement in spending.”
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index:
Note the diverging trends.
