A response to the very poor Australian weekly consumer confidence survey out earlier
Data and my response is here: Australia - ANZ Roy Morgan Weekly Consumer Confidence 109.2 (prior 111.7)
This now via CommSec (a division of the Commonwealth bank, one of Australia's 'big 4' banks)
- Consumer confidence... to the lowest levels in almost a year.
Why the gloom?
- Well, data showed wage growth remaining near 2 per cent, well below the levels of a few years ago.
- Still, data in the past week showed the job market to be in good shape with job growth in the past five months the best for an equivalent period in 12½ years.
- Consumer confidence is also tied to the fortunes of the Aussie dollar and the currency has backed away from US80 cents.
- Aussie consumers are fretting about slower wage growth, rising energy bills and higher healthcare costs.
Of course at the same time the affordability of a rash of spending categories has improved such as food, clothing, travel and transport.
Consumers may say they are gloomy, but importantly they are still spending.
- It's a case of watch what they do, not what they say.
- Real retail trade posted the best growth in the June quarter for any June quarter in the past eight years.
- At the same time, measures of economy-wide spending continue to show firm growth.
- Certainly if consumer spending was slowing, this would be reflected in business conditions and confidence - but both those metrics remain strong.
One key positive in the past week - the measure of whether it was a good time to buy a major household item rose to +35, above the long-term average of +33.
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Note, sometimes Commsec publications are subject to 'ad hominem' style commentary - the firm accused of painting a more positive picture than is perhaps justified according to whoever is doing the critique at the time. ForexLive readers are sensible enough to make up their own minds on this.
