ANZ-Roy Morgan Consumer Confidence jumped 4.4pts to 80.8 this week as retailers gear up for the end-of-year sales period.
The lift in confidence also follows a pause in interest rates for December, announced by the Reserve Bank of Australia last week.
However, despite the increase, consumer confidence has now spent a record 45 straight weeks below the mark of 85.
The index is now 2.1pts below the same week a year ago and nearly 3 points above the 2023 weekly average of 77.8.
Consumer confidence was up in most states, including New South Wales, Victoria, Queensland, and Western Australia, but down slightly in South Australia.
ANZ senior economist Adelaide Timbrell said homeowners seem to be buoyed by rising home prices and the stable cash rate.
“ANZ-Roy Morgan Australian Consumer Confidence rose to its highest since February 2023 driven by stronger confidence among homeowners (both indebted and outright owners),” Timbrell said.
“Inflation expectations are at their second-lowest result in six months, and confidence about the economy has improved markedly.”
Timbrell said economic confidence about the coming year hit its second-highest level since February and confidence about the economy over the five-year horizon hit its best result since March.
“But a large share of households still do not think it is a good time to buy a household item, despite seasonal discounting.”
The drivers of this week’s increase related to views on personal financial situations and the Australian economy’s performance.
Now 22% (up 3ppts) say their families are ‘better off’ financially than this time last year compared to 51% (down 6ppts) that say their families are ‘worse off’.
Looking forward, 31% (down 1ppt) expect their family to be ‘better off’ financially this time next year while 33% (down 3ppts) expect to be ‘worse off’. This is the lowest figure for this indicator for over ten months since January 2023.
A slightly increased 9% (up 1ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months - the highest figure for this indicator for over 18 months since May 2022, just after the RBA first raised interest rates - compared to over a third (36% - down 3ppts) that expect ‘bad times’.
Further ahead, 13% (up 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 18% (down 4ppts) expecting ‘bad times’ - the lowest figure for this indicator for over nine months since early March 2023.
Meanwhile, buying intentions were unchanged this week with 20% of Australians saying now is a ‘good time to buy’ major household items while 53% (down 1ppt) say now is a ‘bad time to buy’.