Consumer confidence about the future fell in early February from its record highs set in January, ANZ-Roy Morgan's survey found. The ANZ-Roy Morgan Consumer Confidence measure fell 8 points in February to 100, "indicating a lack of conviction on behalf of consumers towards opening the wallet," the report said. Consumer confidence surveys are watched by the Reserve Bank and others as an indicator of likely consumer spending, although the survey has shown a big gap opening in recent months between future confidence and actual spending. Future confidence is much stronger than current confidence and sales. This subdued level of consumer confidence will support those arguing for a hike in the Reserve Bank's Official Cash Rate later rather than earlier.
Faced with a rising unemployment rate and rapidly softening housing market it is perhaps of little surprise to see confidence ease. And we need to bear in mind that January did record the largest lift in the history of the survey. The elevated confidence readings against this backdrop still give an aura of improvement for the economy, although the failure of current conditions to lift in a sustainable fashion is a clear pointer that the recovery process will be gradual and guarded. The current conditions measure of our survey fell 10 points and now sits on the key 100 level. The lack of conviction in regard to current conditions (it has wobbled at or around 100 for six months) suggests consumers remain cautious in regard to spending.
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