According to the latest ANZ-Roy Morgan analysis of consumer confidence, the index climbed by 3.3 per cent last week, more than reversing the previous weeks’ falls.
The four-week average rose by 0.4 percentage points to 112.9 to be in line with its long-term trend.
ANZ said that increases were observed across the indicators, with households’ views towards their current finances registering a gain of 5.2 per cent to 107.0, the highest since February. Views about future finances also improved by 1.4 per cent to 123.9.
Expectations for economic conditions for the next year increased by 3.5 per cent on a weekly basis, as did expectations for economic conditions in the next five years (2.6 per cent).
Further, the ‘good time to buy a household item’ sub-index increased by 4.3 per cent, to above its long-term trend.
ANZ head of Australian economics David Plank said the bank suspects that solid fundamentals reasserted their influence last week, after the “dampening” impact of the Queensland floods in the previous week.
“The strength in the housing market is likely providing some support to confidence, with house prices continuing to rise quite strongly and buoyant auction clearance rates suggesting that prices may not yet have peaked,” he said.
However, Mr Plank pointed out that ongoing elevated unemployment and persistent weakness in wage growth will continue to weigh on consumer confidence in ANZ’s view.
“While last week’s pick-up in sentiment is encouraging, we remain of the view that spending growth is likely to remain constrained in a low wage environment, consistent with the recent softness in retail sales.”