Consumer confidence declined in the week to December 10, reversing the previous week’s improvement.

December 12, 2017

Consumer confidence has slipped due to a drop in sentiment towards the health of household finances.

The latest ANZ-Roy Morgan Consumer Confidence Index shows a 0.6 per cent decline to 115.1 points in the week to December 10, effectively reversing the 0.7 per cent increase in the previous week.

ANZ’s head of Australian economics David Plank said confidence in short term financial conditions remains under pressure.

“This reflects several headwinds that consumers face, particularly high household debt and persistently weak wage growth,” Mr Plank said.

Consumers’ view of their current financial conditions fell 2.7 per cent to a six week low last week, while their view on their future financial conditions also deteriorated.

Consumer confidence remains above its long run average, however.

Driving this was a jump in sentiment around current and future economic conditions.

On a four-week moving average, consumers’ views about current and future economic conditions are at their highest point since late 2013, ANZ said. 

“Households’ views towards overall economic conditions have improved substantially over the last two months, supported by a strong labour market and accommodative monetary policy,” Mr Plank said.

“Overall, labour market conditions remain solid and will likely continue to support confidence in the near term”.

Mr Plank said improved sentiment and a bounce in retail sales in October signals the prospect of a stronger gain in consumer spending in the final quarter of 2017, after growth of 0.1 per cent in the September quarter.