The ANZ-Roy Morgan Consumer Confidence Index fell again in August, to its lowest level in 10 months.
The overall index slipped three points to 92, a notable feature being that the proportion of households thinking it’s a good time to buy a major household item - the best retail indicator - fell four points to -12.
"The retail sales data for Q2 (released on Monday this week) surprised to the upside, but the consumer survey data suggests that in the bigger picture, the retail sector will continue to find the going tough for now," ANZ economists say.
Perceptions of current personal financial situations fell a further three points to -24%, the weakest level since October 2023.
And perceptions regarding the economic outlook over the next 12 months fell four points to -20%. The 5-year-ahead measure also fell 4 points, to +3.
House price inflation expectations were steady at 3.5%, while two-year-ahead CPI inflation expectations eased from 5.1% to 4.8%.
ANZ economists say consumers are facing a raft of headwinds, among them falling employment, declining wage growth, the impacts of inflation on necessities, low population growth and falling real house prices.
"That’s a lot, and it’s been outweighing the positive impetus from falling real interest rates."
The good news is that the Reserve Bank has pivoted to being more focused on medium-term downside risks of inflation, rather than near-term upside risks.
"The upshot is, barring any unwelcome upward surprises to inflation, the RBNZ will do whatever is needed with the Official Cash Rate to ensure this economy gets back on its feet.
"It won’t happen overnight, but it will happen."
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