Australia weekly consumer confidence bounces 4.6 pct, more than offsets previous week’s loss

Australia’s weekly consumer confidence for the week ending September 17 bounced 4.6 percent more than offsetting the loss over the previous week. The strength in the index was broadly based, with four out of five indicators rising. The index currently sits at 114.8, the highest level in eight weeks.

Consumers’ views towards current and future economic conditions surged, up 5.8 percent and 12.9 percent respectively. This broadly offset the sharp falls over the previous week. However, the four-week moving average aggregate economic conditions index remains well below its long-run average (101.1 vs 108.1).

Households’ views towards current financial conditions rose 2.6 percent, bringing the index to the highest level in 15 weeks. In contrast, confidence around future financial conditions slipped, down 0.3 percent last week. The four-week moving average aggregate financial conditions’ index has edged above its long term average (115.4 vs 112.8) and seems to be showing some momentum.

Consistent with the improvement in views towards economic conditions, the ‘time to buy a major household item’ index jumped 4.0 percent last week, but remains well below its long-term average suggesting that households remain cautious about big expenditures. Inflation expectations were unchanged at 4.4 percent on a four-week moving average basis.

"Sentiment towards personal finances is unlikely to recover to the levels seen in the second half of 2016 any time soon, as household balance sheets continue to be somewhat stressed because of high levels of debt and low wage growth," said David Plank, Head of Australian Economics, ANZ.

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