(Australian Associated Press)
Consumer confidence continues to tick higher as the housing, jobs and stock markets perform and the Reserve Bank’s rate cut comes into play.
The ANZ-Roy Morgan consumer confidence index rose 0.5 per cent last week, to be 3.6 per cent higher over the past four weeks.
ANZ senior economist Jo Masters says confidence is now 2.6 per cent above its long-run average, underpinned by stronger optimism around household finances.
This was likely driven by the RBA’s May interest rate cut to a fresh record low – of 1.75 per cent – and further gains in equity markets since early April, she said.
“Higher levels of confidence are also consistent with another week of solid (housing) auction clearance rates, particularly in Sydney and Melbourne,” she said.
Ms Masters noted that sentiment was boosted by last week’s jobs report, which indicated healthy conditions in the labour market.
The unemployment rate was steady in April at 5.7 per cent, its lowest since September 2013.
“Interestingly, the current election campaign does not appear to be unnerving consumers despite the fact that the polls remain close,” she added.
“With another five weeks left in the election campaign, confidence remains vulnerable to any key developments.”
There was a bounce in people’s opinions of their personal finances, a measure which is well correlated with household spending.
Consumers’ views about their finances in the next 12 months rebounded 3.4 per cent, and their assessment of their finances compared to a year ago was up 1.4 per cent.
Respondents’ were less optimistic about the wider economy, with views about economic conditions in the next year and five years both sliding slightly.