The ANZ-Roy Morgan Research (RMR) consumer confidence index has more than recovered from its Budget-induced slump, rising another 2.7 points in the week ended 27 July to 116.2, and is now at its highest level since late-January and some 2.7% above its long-run average reading of 113.2 (see next chart).
According to ANZ chief economist, Warren Hogan:
While the improvement in confidence was relatively broadly based last week, households’ perceptions about ‘financial situation compared to a year ago’, a subindex most closely correlated with consumer demand, has now returned to levels seen before the budget.
The below chart, which plots the most recent Westpac-Melbourne Institute’s Consumer Sentiment index against the ANZ-RM Consumer Confidence index, highlights the mood of the Australian consumer more clearly:
Expect next month’s Westpac consumer sentiment reading to record a big bounce.
