Consumers are more guarded on economy: CommSec's Craig James

GUEST OBSERVER

The ANZ/Roy Morgan consumer confidence rating fell by 3.6 percent to 113.6 in the week to October 23.

The index is still above the average of 112.8 since 2014.

The consumer confidence figures have implications for finance providers, retailers, and companies dependent on consumer and business spending.

What does it all mean & what are the implications?

It seems like the latest jobs data has made Aussies a little more guarded about the economic outlook. Full-time jobs reportedly fell by 53,000 in September with part-time jobs up by 43,200. It is unlikely that these moves actually occurred – the data reflects the vagaries of monthly seasonally adjusted estimates. Still, positively, unemployment was at a 3-year low of 5.6 percent in the latest month.

Overall though, consumer confidence remains above average including estimates of personal finances and the outlook for finances. Employment data is also backward-looking. Indicators of job ads and job vacancies have been rising – pointing to stronger employment ahead.

What do the figures show?

Consumer confidence

The ANZ/Roy Morgan consumer confidence rating fell by 3.6 per cent to 113.6 in the week to October 23. The index is still above the average of 112.8 since 2014. Four components of the index fell in the latest week and one component was flat:

 The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank. 

Craig James is the chief economist at CommSec.