Most of the questions asked about household financial and national economy outlooks were more negative than the previous survey. Photo: Unsplash/ Artem Beliaikin
- Consumers turn more pessimistic in October
- More worried about their current financial position
- More think bad time to buy big ticket item
- Consumers too pessimistic - ANZ
Consumer confidence fell in October as soft economic headlines reinforce consumer caution.
The ANZ-Roy Morgan Consumer Confidence fell from 94.6 to 92.4 in October, erasing its gains in September.
A reading under 100 points indicates more pessimists than optimists.
ANZ senior economist Miles Workman said despite other data suggesting the economy is turning a corner, consumers are still weighed down by job and cost-of-living worries.
"Consumer confidence hasn't budged even as many other economic indicators have improved from their mid-year lows. The reluctance to spend in recent years has hit the retail sector hard."
Most of the questions asked about household financial and national economy outlooks were more negative than the previous survey.
Fewer consumers thought it was a good time to buy a major household item, a strong indicator of future spending; although ANZ said its recent card spending data contradicts this.
Only a net 9 percent of consumers thought they would be better off in a year's time, a fall of 5 percent.
Economy turning
Workman said despite consumer caution, mixed data readings are typical at economic turning points and things are improving under the surface.
"There are signs of resilience: consumer arrears have been declining (according to credit rating agencies), employment has returned to modest growth, and retailers are reporting improved activity. This is supported by our card spending data, which shows a return to growth across a broad range of discretionary categories."
He said the Reserve Bank was committed to backstopping an economic recovery and consumers were often the last to notice things have improved.
"Easier monetary policy is starting to work its magic, but it's quite typical that it doesn't feel like it until the recovery is well established."
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