(Australian Associated Press)
Consumer confidence has ticked higher for a second straight week, as expectations for an improvement in economic conditions rise.
The ANZ-Roy Morgan Consumer Confidence Index for the week to May 28 rose 1.5 per cent to 112.2 – nearly the same level as before the federal budget and still above the 100-point level that separates optimism from pessimism.
Households’ expectations towards current and future economic conditions bounced last week, with sentiment towards current economic conditions at its highest level in seven weeks.
“The rise in confidence, in particular the improvement in views around economic conditions, likely reflects the improving labour market conditions,” ANZ head of Australian economics David Plank said.
Australia’s official unemployment rate fell back to 5.7 per cent in April, with the number of workers rising by a better-than-expected 37,400, mostly in part-time jobs.
However, households’ views around financial conditions continued to drift lower, which could be worrying because of its likely impact on consumer spending in the future.
Mr Plank said the index could remain volatile because of a slew of economic data over the next few weeks, but was likely to improve over the medium term.
“In our view, consumer confidence is likely to improve further over the next few months, albeit slowly, as elevated business conditions feed into stronger labour market conditions,” he said.
However, “confidence may be volatile over the next few weeks given the flow of data culminating with the Q1 GDP (first quarter gross domestic product) release as well as evolving global political conditions,” he added.