Consumer confidence Photo: RNZ
Consumer confidence remains weak and nose-dived following the recent release of surprisingly weak second quarter economic data.
The ANZ-Roy Morgan Consumer Confidence Index rose slightly to 94.6 points from 92.0 this month, with anything under 100 indicating pessimists outnumbered optimists.
"Confidence was markedly lower in the days following the release of the very weak Q2 GDP data," ANZ chief economist Sharon Zollner said.
"The data preceding the GDP release averaged 96, while the responses that came in afterwards averaged just 77."
She said consumer confidence was likely to remain weak until the economy improves.
"How long the dampening impact on confidence might last will depend partly on whether the tenor of the data flow turns sluggishly or enthusiastically higher from here."
The latest survey also suggests two-year-ahead CPI inflation expectations were unchanged at 4.8 percent.
"Given food price inflation is running at 5 percent, it's unsurprising that household inflation expectations are significantly higher than official headline CPI inflation," she said.
While a net 14 percent (+1pt) of respondents expected to be better off this time next year, a net 11 percent think it was a bad time to buy a major household item.
Perceptions regarding the economic outlook over the next 12 months fell 3 points to a net drop of 23 percent.
However, Zollner said there was some positives in the data.
"It's not all doom and gloom out there. The proportion of households saying that they feel worse off than a year ago has been steadily declining, even as unemployment has been creeping higher.
"Consumer arrears have been dropping, according to credit rating agencies. Monthly filled jobs have returned to modest growth.
"Easier monetary policy is starting to feed through, and we expect the economy to put in a markedly improved performance over the next 12 months than the last - though that isn't saying a lot, to be fair."
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