Photo:
Consumer confidence has picked up and is suggesting the worst of the economic downturn may be coming to an end.
The ANZ-Roy Morgan Consumer Confidence index gained five points in July to 88 points, which remained deeply pessimistic.
ANZ chief economist Sharon Zollner said consumers were still doing it tough because of high costs of living and interest rates.
"It's still very low, but has clawed back about half the March-April fall that coincided with 'recession' headlines. The lift was driven by improving expectations rather than the here and now."
The survey's future conditions index, which asks about future prospects and expectations, was higher with 20 percent of respondents expecting to be better off next year.
Consumers were also more upbeat about the economic outlook in the near and more distant future.
"There's a hint in this month's survey that consumers are perhaps starting to feel a little optimism that the worst will soon be past," Zollner said.
"The here and now is tough going for many, and nice-to-haves are increasingly being done without."
The survey showed two-year inflation expectations eased from 4.2 percent to 3.7 percent, while house price expectations for the coming year eased a full percentage point to 2.4 percent.
Zollner said sentiment would also be getting a lift from expectations of Reserve Bank official cash rate cuts in the not too distant future, although she expected the central bank would be looking closely at soon to be released labour market numbers, and would also want to see evidence of the effect of the soon-to-be implemented tax cuts.
"Although some are picking a rate cut as soon as next month, we think the RBNZ will move in November to be assured by the data inflation is under control."
