The ANZ-Roy Morgan consumer confidence index was dead flat in the week ended 8 May 2016, and continues to track slightly above the long-run average of 112.7 (see next chart).
Four out of five survey components either held steady or fell over the week whereas the sub-index tracking whether now was a good time to buy a major household item rose by 2.2%.
According to the head of Australian economics at the ANZ, Felicity Emmett, the uplift from the RBA’s decision to cut the official cash rate was offset by pessimism surrounding the Federal Budget:
“Consumer confidence was unchanged last week following a mixed bag of ‘good’ and ‘bad’ news flow during the week…
Typically a cut in the RBA’s cash rate tends to lift confidence, and on its own we expect that was a positive factor for confidence given the lift in consumers views towards buying a household item…
“It seems that consumer reaction to the Commonwealth Budget is likely to have weighed on confidence”…
The below chart, which plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index, continues to show a wide divergence, with Westpac’s displaying pessimism and ANZ’s displaying slight optimism:
