ANZ-Roy Morgan Consumer Confidence lifted by 1.8 points to 78.2 this week as the Reserve Bank of Australia (RBA) pauses the cash rate for a fourth consecutive month.
ANZ senior economist Adelaide Timbrell said the rise was driven by growing confidence in financial conditions amongst Australians.
“The four week average of inflation expectations went sideways despite media coverage of the August monthly CPI indicator (5.2% y/y), which suggests a touch of upside risk to the inflation outlook,” Timbrell said.
“The gap in confidence between outright homeowners and those paying off their home remains wide, though indebted homeowner confidence is rising, while outright homeowner and renter confidence are trending down.
“Current finances confidence (which refers to current finances compared to a year ago) was at a five-month high.”
According to ANZ and Roy Morgan data, now 20% of Australians (up 1 percentage point) say their families are ‘better off’ financially than this time last year compared to 51% (down 3ppts) that say their families are ‘worse off’ financially.
Under a third of Australians (29% - up 1ppt) expect their family to be ‘better off’ financially this time next year while 35% (down 1ppt) expect to be ‘worse off’.
Regarding the Australian economy, 8% (up 1ppt) of Australians expect ‘good times’ for over the next twelve months compared to 37% (up 2ppts) that expect ‘bad times’.
Meanwhile, there was a 2 percentage point drop in net sentiment over the economy over the next five years, with now 20% of Australians expecting ‘bad times’ ahead, while 11% (up 1ppt) expecting ‘good times’.
When it comes to buying intentions for major household items, now 20% (up 1ppt) say now is a ‘good time to buy’, compared to 54% (unchanged) who say now is a ‘bad time to buy’.
The lift in consumer confidence comes as retailers welcome a fourth consecutive RBA rate freeze.
National Retail Association (NRA) CEO Greg Griffith said the RBA’s decision is a nod to business owners and their customers in the leadup to the most important retail trading period of the year.
“Pausing interest rates this month will allow consumers to spend more freely during the November/December sales period and allow retailers to better assess their employment needs for this period,” Griffith said.
“Almost 43 per cent of small businesses aren’t breaking even, and with more Australians being pushed into financial hardship, retail season is a make-or-break period for struggling retailers.”