Consumer Confidence: Another 2024 Low
Consumer confidence in Australia has fallen to a new low for the year, according to the latest ANZ-Roy Morgan Consumer Confidence Index.
Economic outlook
Consumer confidence about the five-year outlook for the economy fell to its lowest level for the year. This is likely due to concerns about rising interest rates, inflation, and the cost of living.
“The Reserve Bank of Australia (RBA) keeping the cash rate unchanged at last week’s meeting did little to instill confidence in consumers,” said ANZ economist Madeline Dunk.
Current financial conditions
Consumers’ assessment of their current financial situation improved slightly, with the ‘current financial conditions’ (over the last year) subindex increasing by 1.2pts. However, the ‘future financial conditions’ (next 12 months) subindex rose by only 0.6pts, suggesting that consumers are still concerned about the economic outlook and the impact it could have on their finances.
Mortgage holders vs renters
Confidence among mortgage holders fell 3.8pts last week, to its lowest level of 2024. This may be linked to recent discussion that interest rates will remain higher for longer.
“This is the fourth consecutive week that mortgage holders’ confidence has fallen,” said Dunk. “This is in contrast to renters, whose confidence has been relatively stable over the past few weeks.”
Government response
The Federal Government is expected to announce a range of cost-of-living measures in tonight’s Budget. It is hoped that these measures will help to boost consumer confidence and ease the pressure on households.
“We’ll be looking to see if confidence picks up following tonight’s Budget,” said Dunk.
also read:Consumer Confidence Plummets to Record Low in 2024, Impacting Economic Stability and Growth
Divya