GDP, falling petrol prices lift confidence
The weekly ANZ-Roy Morgan Australian Consumer Confidence index rose 5.6 per cent to 123 points in the week to June 10, with broad-based gains sending confidence to its highest point since mid-January.
The jump in confidence likely reflected stronger-than-expected first quarter economic growth result and a fall in petrol prices, trumping concerns about house price weakness and rising global trade tensions, ANZ senior economist Joanne Masters said.
“It is encouraging to see confidence recover sharply after two straight weekly falls, particularly given that the improvement was broad based. On a weekly basis, confidence is now at its highest since mid-January,” she said.
“This jump in confidence likely reflects favourable coverage of the strong Q1 GDP result, which appears to have trumped concerns about the weakness in house prices and rising global trade tensions. The fall in petrol prices last week may also have boosted confidence.”
Masters added that the expectation of strong jobs figures later this week should underpin strong confidence next week.
“In the near term, we expect another strong jobs growth print later this week, which should act to consolidate this rise in consumer confidence. That said, geopolitical developments continue to evolve and have the potential to weigh on confidence. Looking forward, however, it will be interesting to see whether higher confidence translates into stronger spending, given a softening housing market, still low wage growth, high levels of debt and a low savings rate,” she said.