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A ‘New Year’s bump’ helped lift consumer confidence to one of the highest levels seen since the beginning of 2023, according to new data.
The latest ANZ-Roy Morgan Consumer Confidence has revealed that consumers are feeling particularly positive at the start of 2025.
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The index rose 3.6 points last week to 87.5 points, helped by a boost typically generated in the first week of the year.
This is highest index rating for the start of a new year for three years (since 2022).
Indeed, the index showed that the four-week moving average lifted 0.5 points to 86.3 points.
Consumer confidence is now 2.7 points above the same week in 2024, (when it was 84.8) and 4.6 points above last year’s average of 82.9.
Data showed consumer confidence increased in the four biggest states of NSW, Victoria, Queensland, and Western Australia, but declined in South Australia.
Short-term economic confidence (measured over the next 12 months), increased 0.7 points, while medium-term economic confidence (gauged over the next five years), rose 2.0 points.
The ‘time to buy a major household item’ subindex bounced 7.2 points to post its third-highest reading since June 2022, though it was below the Black Friday peak.
Consumer confidence rides ‘upward momentum’
ANZ economist Madeline Dunk said that the increase in confidence formed part of a positive trend.
“We expect the upward momentum in ANZ-Roy Morgan Consumer Confidence to continue through 2025, as tax cuts, rising real wages and eventually rate cuts support household disposable incomes,” she said.
“ANZ Research expect[s] the first Reserve Bank of Australia rate cut in May 2025,” Dunk added, reflecting that rate cuts are expected to have a major impact on household spending.
However, Roy Morgan CEO Michele Levine was more cautious in her analysis.
She said: “[H]owever you look at it – consumer confidence is still low.
“Looking at the longer-term trend on consumer confidence it has now been below 90 for 136 weeks (well over two years) This compares to a previous record of 70 weeks below 90 from March 1990 – June 1991.”
Despite cooling inflation, weekly inflation expectations rose 0.3 percentage points to 5.1 per cent, the highest weekly level for five months – since early August 2024.
The four-week moving average was unchanged at 4.8 per cent.
Annual inflation rate rose to 2.3 per cent in the 12 months to November 2024, per the monthly Consumer Price Index (CPI) indicator, up from a 2.1 per cent rise in the previous month.
The annual trimmed mean of inflation – one of the figures the Reserve Bank of Australia (RBA) is most interested in when setting the official cash rate – fell to 3.2 per cent in November 2024, down from 3.5 per cent in October.
The figure is outside the RBA’s target inflation band of 2–3 per cent.
[Related: Inflation rose in November, but trimmed mean continues to fall]
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