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After a solid start to the year, recent figures show that consumer confidence slipped back in the week ending 22 January, driven by a deterioration in households’ views towards their future finances.
According to the latest instalment of the ANZ-Roy Morgan Australian Consumer Confidence report, consumer confidence slipped 1.9 per cent to 117.0 in the week ending 22 January. According to ANZ the decline was broadly based across four of the five subindices.
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In particular, households’ views towards their future finances fell by 3.0 per cent, reversing previous gains and falling to its lowest value in five weeks, however ANZ noted that the indicator remains well above its long-run average.
Similarly, households’ views of economic conditions over the next 12 months declined 2.0 per cent after rising 11.2 per cent over the previous two weeks. Views of economic conditions over the next five years also fell by 2.4 per cent after a 2.8 per cent rise over the previous two weeks.
Further, the post-Christmas recovery in views on whether ‘now is a good time to buy a household item’ has been reversed by the sub-index decreasing by 2.5 per cent in the week.
Meanwhile, the four-week moving average in inflation expectations lifted for the third consecutive week to 4.4 per cent last week from 4.0 per cent in mid-December, ahead of the Q4 CPI results released yesterday.
Commenting on the results, ANZ senior economist Jo Masters explained that the unwinding of consumer confidence likely reflects the end of the traditional holiday season and perhaps the fall in domestic stock prices.
“Recent headlines about Brexit and ongoing uncertainty about the impact of a Trump presidency may have also impacted,” she elaborated.
“Even so, the headline index remains quite robust, and encouragingly, households’ views of overall financial conditions remain well above the long-term trend, suggesting a positive outlook for consumer spending.”
[Related: Consumer confidence bounces back]
