Better late than never, the Reserve Bank’s May rate cut has finally made consumers smile.
The ANZ-Roy Morgan consumer confidence index rose 1.1 per cent last week, staying above its long-run average for the third straight week.
The result was a drawn-out reaction to the previous week’s RBA interest rate cut, ANZ head of Australian economics Felicity Emmett said.
“Stronger equity markets were also likely helpful in lifting confidence,” she said.
Ms Emmett noted that mixed news out of the election battle last week would have had little impact on sentiment.
“With such a long election campaign, however, it will be interesting to see how quickly voter fatigue sets in,” she added.
A sharp bounce in people’s opinions of the economic outlook was behind the gains.
Consumers’ views about economic conditions in the next year surged 6.1 per cent, and their views about the economy in the next five years jumped 3.3 per cent.
“With the economic outlook still quite uncertain, we expect that confidence will remain sensitive to developments in the domestic economic data, as well as the evolution of the political debate in the lead-up to the July election,” Ms Emmett said.
Respondents’ were less optimistic about their own finances, with the subindex falling 1.8 per cent despite remaining well above the long-run average.
And the subindex on whether now is a good time to buy a major household item slipped 0.7 per cent.