Confidence up but no miracle cure: ANZ

Consumer confidence in the latest ANZ-Roy Morgan survey rose in February with a lift in perceptions of future conditions.

But the lift did not necessarily mean good times were on the way back for the retail sector, ANZ economists said.

Inflation expectations rose for a second month, up from 4.3 per cent to 4.5 per cent.

Perceptions of current personal financial situations were unchanged at -12 per cent, which ANZ said was still low but much higher than a year ago.

A net 18 per cent expected to be better off this time next year, down 1

Household inflation expectations can be volatile but they did a good job of identifying the inflation pick-up promptly in 2020, so are worth watching

ANZ

point from the previous survey.

But the same number, a net 18 per cent, thought it was a bad time to buy a major household item, up 1 point from the month before.

That was still low but very different from the July 2023 low of -39 per cent.

Perceptions regarding the economic outlook in 12 months’ time rose 2 points to -20 per cent.

The survey found expectations of consumers price index (CPI) inflation in two years’ time lifted from 4.3 per cent to 4.5 per cent.

“Household inflation expectations can be volatile but they did a good job of identifying the inflation pick-up promptly in 2020, so are worth watching,” ANZ added.

The survey said household inflation expectations were of secondary importance because households did not set prices, but they could impact wage demands and the ease with which businesses passed through price increases.