Australian Consumer Confidence Rises Despite Threat of More Rate Hikes

By James Glynn

SYDNEY--Australian consumer confidence rose last week despite widespread expectations that the Reserve Bank of Australia will deliver a further 50-basis-point rate hike today.

Consumer confidence increased 1.3% the previous week, reaching its highest level since early June, according to a weekly survey by the ANZ Bank and pollster Roy Morgan.

The RBA has been raising interest rates at the fastest pace since 1994 since May. House prices have started to fall as a result, but consumer spending remains robust for now.

The survey data by housing status shows that for people renting a home, confidence jumped last week and is now at a higher level than it was before the RBA started raising interest rates, said David Plank, ANZ's head of Australian economics.

However, for people paying off a mortgage and for those who own their home, confidence is sharply lower, down by 19% and 13% respectively since the RBA's first rate hike in May, he added.

"The recovery in consumer confidence is encouraging, but it remains in very negative territory despite the lowest unemployment rate in decades," Mr. Plank said.

The four-week average for inflation expectations nudged 0.1 percentage points lower to 5.5%, according to the survey.

Confidence around both current and future economic conditions increased for a fourth straight week, by 1.1% and 2.6% respectively. Both readings are at their highest level since late May, the survey showed.

Consumers were also more upbeat about buying a major household item. The measure rose 2.4% last week after a 5.5% drop the week before.

The weekly confidence rating is based on 1,497 interviews conducted online and over the telephone during the week to Sunday.

Write to James Glynn at [e-mail]; @JamesGlynnWSJ

(END) Dow Jones Newswires

September 05, 2022 19:49 ET (23:49 GMT)

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