Consumer confidence bounces back

Household item index falls.

ANZ Roy Morgan Consumer confidence rose 0.8% to 116.0 last week, ending a string of weekly declines. Though the headline increase was modest, the detail was more encouraging, with four in five subindices posting gains.

Views towards current financial conditions rose a solid 4.6% last week, after three successive falls while views towards future conditions bounced 3.5%, entirely reversing the previous week’s fall.

Sentiment toward both current and future economic conditions continued to recover, rising 0.5% and 0.9% respectively, following similar gains in the previous week. The current conditions sub-index has risen to 103.9 after falling to its long term average of 101.9 in the last week of March.

However bucking the trend was the ‘time to buy a household item’ sub-index  that fell 4.3%, more than reversing the previous week’s 1.5% rise. Inflation expectations edged up to 4.5% on a four-week moving average basis.

ANZ’s head of Australian economics, David Plank, commented: “It is encouraging to see confidence rise, for the first time this month, driven by a solid increase in sentiment towards financial conditions. Views towards both current and future conditions remain above their long term average, despite the strain on households’ balance sheets.”

He said the sharp fall in economic conditions through most of February and March, likely reflected concerns about trade policy and the associated impact on financial markets.

“But since then we have seen a small, but steady, recovery in April, particularly in sentiment towards current conditions. On this front, a positive employment report may provide further support.”

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