Consumers a touch more upbeat but still wary

Consumer confidence has recovered some lost ground but remains deeply in negative territory.

The index collated by ANZ and Roy Morgan recovered 2.3 points to hit 78.1 points last week, with the robust labour market and the possibility of an extended pause on interest rates potentially feeding into the more upbeat reading.

But the gauge remains well below the monthly average of 111.1 points and has been lodged between a narrow band of 75 points to 78.5 points for six weeks in a row.

ANZ economist Adelaide Timbrell said falling real wages due to still-high inflation was likely working to offset any positive momentum in the economy and keeping a lid on confidence levels.

“The resilient labour market and the beginning of what we think will be an extended pause from the RBA is yet to result in a confidence level above 80, which was achieved even during Delta lockdowns in 2021,” the economist added.

The different components that make up the index either improved or were unchanged, with “future financial conditions” up five points after a 4.2 point fall the week before.

A measure of more immediate financial conditions did not budge.

A separate dataset from job marketplace Seek showed advertised salaries rising by 0.4 per cent in July, slightly higher than the rises across April to June.

Over the year, advertised salaries rose by 4.6 per cent, up from 4.5 per cent in the year to June.

“Advertised salary growth remains solid,” Seek senior economist Matt Cowgill said.

“The Fair Work Commission’s decision to raise award wages by 5.75 per cent was likely a contributing factor here – but it’s notable that the most award-reliant industries, such as hospitality and tourism, didn’t see particularly strong growth.”

Queensland advertised salaries were up 5.3 per cent over the year, following a growth trend that began in 2021.

The territories are lagging, with 3.7 per cent advertised salary growth in the Australian Capital Territory and 2.5 per cent in the Northern Territory.

The largest rises by industry were in insurance and superannuation (up 9.2 per cent), community services (6.7 per cent) and trades and services (5.9 per cent).

The slowest growth was recorded in government (0.9 per cent year-on-year), continuing a trend of slow public sector growth.

Meanwhile, Reserve Bank deputy governor Michele Bullock will provide some insight into the key economic issue of climate change when she delivers a speech in Canberra on Thursday.

Ms Bullock will take over as head of the central bank after governor Philip Lowe steps down on September 17.

The Intergenerational Report released last week predicted higher temperatures could reduce economic output over the next four decades by up to $423 billion in today’s dollars.


Poppy Johnston and Paul Osborne
(Australian Associated Press)


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