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A bounce in confidence in current financial and economic conditions drove a boost in consumer confidence last week, with views on economic conditions the strongest they have been in eight weeks.
According to the ANZ-Roy Morgan Australian Consumer Confidence report for the week ending 29 January, consumer confidence rose by 0.9 per cent to 118.1 in the week ending 29 January. According to ANZ, the rise was primarily driven by an increase in consumers’ confidence around current financial and economic conditions.
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Households’ views towards their current finances lifted by 3.4 per cent, and households’ views of economic conditions over the next 12 months jumped 5.4 per cent, more than reversing its 2.0 per cent fall the week prior. The index now sits at its highest level in eight weeks.
Meanwhile, households’ views of economic conditions over the next five years recorded a 3.0 per cent decline.
Overall, ANZ senior economist Felicity Emmett remarked that the resilience of consumer confidence amidst political uncertainty is “encouraging”.
“In particular, sentiment around current financial and economic conditions has improved significantly since the sharp drop in the wake of the weak Q3 GDP report,” she continued.
“Importantly, households’ views of overall financial conditions as well as the ‘time to buy a household item’ index remain above their long-term trends, suggesting a positive outlook for consumer spending.”
The results also revealed that inflation expectations edged down last week, although ANZ pointed out that the four-week moving average rose to 4.5 per cent, which is its highest value since December 2015.
Ms Emmett commented: “Inflation expectations ticked down last week, following the weaker-than-expected Q4 CPI report.
“Higher petrol prices have likely pushed inflation expectations up over recent weeks, but with last week’s CPI report suggesting that inflation is unlikely to turnaround sharply any time soon, we expect some of the recent rise in inflation expectations may be unwound.”
[Related: Consumer confidence unwinds]
