Consumer confidence has bounced back, as low interest rates trump consumers’ concerns over the unexpected rise in the unemployment rate reported earlier this month.
ANZ-Roy Morgan Consumer Confidence increased 0.9% to 113.5 last week, bringing the levels back just above the long-run average.
The recovery was driven almost entirely by an 11.1% rise in household perceptions about their ‘financial situation compared to a year ago’, the subindex most closely correlated with consumer demand.
ANZ chief economist Warren Hogan said this marks the beginning of an upwards trend, as he remains confident about consumer spending over the coming year.
“Signs that ANZ-Roy Morgan Consumer Confidence is bouncing back, combined with strengthening business surveys, gives us more confidence that the non-mining recovery remains on track. We expect consumer spending to remain moderate in 2014 before improving in 2015,” Hogan said.