The ANZ Roy Morgan Consumer Confidence Index slipped 1.9 per cent last week partly reversing the previous week’s gain and dragging the index back down below its long run average.
The survey showed households’ expectations for economic conditions next year are down 1.9 per cent. Expectations for economic conditions over the next five years dropped a sharp 4.1 per cent, reaching its lowest level since September 2015.
ANZ senior economist Felicity Emmett said the figures come despite last week’s strong labour market report and ongoing strength in the housing market.
“Rising geopolitical risks, however, have impacted the local share market and are likely feeding through to households’ concerns about the economic outlook,” Ms Emmett said.
“Moreover, the RBA’s focus and the associated media spotlight on the exuberance in house prices in Sydney and Melbourne as well as high levels of household debt is possibly feeding into concerns about the outlook.
“For some time, we have worried that households could decide to rein in consumption growth in response to the combination of low wage growth and rising household debt. The recent decline in confidence and the weakness in retail sales suggest this may be occurring.”