Consumers worry about economy’s future

Simone Ziaziaris
(Australian Associated Press)

 

Consumer confidence has eased slightly in the past week but views towards the economy’s future remain downbeat.

The ANZ-Roy Morgan Consumer Confidence Index fell 0.6 per cent in the past week to 114.1, with negative views towards future economic conditions offset by a 3.3 per cent lift in optimism in the time to buy a major household item index.

ANZ senior economist Felicity Emmett said consumer confidence is hovering around its long-term average, buoyed by ongoing strength in the labour market and optimism around current conditions.

But, while views towards current economic conditions remained virtually unchanged, up just 0.1 per cent, confidence around future economic conditions had slipped 6.5 per cent, she said, reflecting ongoing concerns around household finances if wage growth remains weak.

“Though the headline number showed little change last week, there has been significant volatility in responses over the past few weeks, particularly in consumers’ views towards future economic conditions,” Ms Emmett said in a statement on Tuesday.

She said the concerns were likely being exacerbated by the prospect of interest rate rises over the next year or so.

“As such, we see a pick-up in wage growth as the key to a sustained recovery in confidence,” she said.

Households’ views towards current financial conditions showed little change, up 0.1 per cent, while confidence around future financial conditions slipped 0.8 per cent.

Meanwhile, inflation expectations remain steady at 4.4 per cent on a four-week average basis.

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