Consumer Confidence
Pedestrians walk past a clothing store advertising a sale in central Sydney April 4, 2013. Australian retail sales surged 1.3 percent in February, far above expectations and the biggest rise in over three years, the clearest sign yet that consumer demand is responding to lower interest rates. Reuters/David Gray

A second consumer confidence survey made by ANZ-Roy Morgan, released on Tuesday, shows a slight improvement in the index by 0.5 percent to 115.5 for July. The results differ from the consumer confidence survey made by Westpac-Melbourne Institute, released on July 13, which showed the main index go down 3 percent to 99.1 in July.

Despite the slight uptick in ANZ-Roy Morgan survey, the long-run average was higher at 112.8, reports Business Insider Australia. Over a 12-month period, economic outlook went up 1.5 percent, higher than the 1 percent increase for the five-year outlook.

Despite the minor improvement in consumer confidence, ANZ points out that current finances indicators dipped by 5.3 percent over the past five weeks. It suggested “heightened uncertainty and possibly the slowdown in employment growth have weight on household sentiment.”

Although there were declines even if there were improvements in Australian house and shareprices, two of the major wealth storage for households, one more component of the index was positive. It was the 3 percent hike in purchasing decision now to buy a major household item.

The Australian stock market’s strong performance and reduced financial volatility explains the boost in confidence levels, says Felicity Emmett, ANZ head of Australian economics. But Emmett says there is a need to monitor the survey’s measure on personal finances, particularly its relationship to household consumption levels.

Emmett adds the deterioration in consumers’ views towards their finances reflects the combined effects of higher global uncertainty and the slowing of domestic employment growth. “The strong performance in the equity market and, more broadly, the improvement in financial market volatility are likely to have been key factors in the rebound,” Yahoo Finance quotes Emmett.

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