The ANZ-Roy Morgan Research consumer confidence index was basically steady in the week ended 25 October, rising 0.1 points to 113.4 to be tracking marginally above its long-run average (see next chart).
The sub-index tracking family finances compared to a year ago and those tracking the economy dipped, but these were more than offset by a strong jump in the sub-index tracking whether now was a good time to buy a major household item.
According to Felicity Emmett, co-head of Australian economic at the ANZ, weakness in perceptions towards family finances was likely driven by the lift in mortgage rates by the banks, which is likely also weighing on housing market sentiment:
“Consumer confidence consolidated just above its long run average last week. Sentiment about current personal finances fell sharply, likely reflecting news of higher mortgage rates.
Household views about their own finances remain fairly solid though. It’s the economic outlook that worries them. For some time they have been without a positive narrative on the prospects for the economy. But a broadly stable unemployment rate over the past year, and the hope that Prime Minister Turnbull can deliver better medium term outcomes for the economy, are factors which look to have driven some improvement in households’ economic outlook.
The challenge will be to maintain this upward trend in an environment where the housing market looks to be slowing.”
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index:
Both are fairly lacklustre.
