ANZ-Roy Morgan Consumer Confidence rose 2.1% to 114.5 last week, reversing the falls in the previous three weeks. Confidence now stands above the long run average and just a touch below the post-Budget reaction.

The rise last week was driven by an improved view of the outlook on the economy and finances. The sub index on ‘finances in the next year’ rose 3.6%, ‘economic conditions in the next twelve months’ rose 4.1%, and ‘economic conditions in the next five years’ rose 4.3%.

However, overall views on the outlook remain at subdued levels driven mainly by economic conditions, rather than finances (which remain above long term average).

Contrary to the outlook, views on current conditions were flat to down. There was a small rise in ‘time to buy a household item’ (0.2%), whereas ‘finances compared to a year ago’ fell 0.8%.

ANZ co-head of Australian Economics Felicity Emmett said that ANZ-Roy Morgan Consumer Confidence bounced last week, reversing almost all of the fall in the previous three weeks.

“The bounce in employment numbers and the fall in the (Roy Morgan) unemployment rate seems to have sent a positive signal, which is being reflected in consumers’ view towards future financial and economic conditions,” she said.

“While a lift in consumer expectations is an encouraging sign, they remain well below long run averages and a sustained bounce is required to generate stronger growth in household spending.”