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ANZ-Roy Morgan Consumer Confidence: Rate cuts working but not enough

Data collected last weekend (Saturday and Sunday), based on 1,021 face-to-face interviews.

ANZ-Roy Morgan Consumer Confidence fell by 0.7% to 112.4 in the week ending February 1. This follows a fall of 0.4% the previous week and leaves confidence around its long-run average.

The response of ANZ-Roy Morgan Consumer Confidence to rate cuts is now the weakest of the last five easing cycles with concerns around the Federal budget, the economic outlook, and job security weighing on sentiment in 2014. However, the initial response of confidence to rate cuts was closer to normal, with the added cash flow from lower rates and higher house prices providing a moderate boost to sentiment. This suggests that further rate cuts could provide some boost to confidence in coming months.

There continues to be little sign of lower petrol prices boosting ANZ-Roy Morgan Consumer Confidence, in contrast to the US (Figures 3 & 4). While this may reflect a lagged response from Australian consumers, it could also indicate that a strong labour market in the US is helping support confidence, whereas in Australia labour market conditions remain a hindrance to confidence.

ANZ Chief Economist Warren Hogan commented:

“With further monetary policy easing likely imminent, the key challenge for the RBA is to communicate the rate cut in a positive light so as to not further damage ‘animal spirits’ in the economy. The RBA can do that by emphasising that lower petrol prices provide both extra cash flow to consumers and businesses, as well as a lower inflation trajectory which gives the scope to lower interest rates. As such, this extra push to the economy should see growth accelerate back to trend in 2016 and 2017.”

ANZ-Roy Morgan Consumer Confidence Rating - February 3, 2015 - 112.4

ANZ-Roy Morgan Consumer Confidence Rating - February 3, 2015 - 112.4

ANZ-Roy Morgan Consumer Confidence Rating - February 3, 2015 - 112.4

Click to view the PDF of the ANZ-Roy Morgan Weekly Consumer Confidence Release.

Latest ANZ-Roy Morgan Consumer Confidence Releases

Latest ANZ-Roy Morgan Australian & Asia-Pacific Consumer Confidence Data Tables

Related Research Reports

The latest Roy Morgan Consumer Confidence Monthly Report is available on the Roy Morgan Online Store. It provides demographic breakdowns for Age, Sex, State, Region (Capital Cities/ Country), Generations, Lifecycle, Socio-Economic Scale, Work Status, Occupation, Home Ownership, Voting Intention, Roy Morgan Value Segments and more.

You can also view our monitor of Monthly Australian Unemployment & Under-employment Estimates.