The confidence in “current financial conditions” rose 2.4 points, while confidence in “future financial conditions” jumped 5.7 points.
Weekly inflation expectations also rose 0.3 percentage points to 5.1 per cent. However, its four-week moving average remained unchanged at 4.8 per cent.
The “time to buy a major household item” sub-index recorded a 7.2-point increase, representing its third highest reading since June 2022, but remained below the Black Friday peak.
ANZ economist Madeline Dunk believes the upward momentum in consumer confidence will continue through 2025, helped by tax cuts, rising real wages and eventually, rate cuts.
However, ANZ Research expects the first RBA rate cut in May.
Meanwhile, the NAB Consumer Stress Index fell to a below average 57.6 points in Q3 2024, down from 58.9 points in the previous quarter and 57.7 points at the same time last year as pressure on consumers abated in the September quarter.
In Q3, all components of the index – which takes into account cost of living, job security, ability to fund retirement, government policy and health – were down.
While cost of living remained the biggest driver of stress, it “encouragingly eased” as monthly inflation showed signs of slowing.
Moreover, fewer consumers reported noticing higher prices across most spending categories monitored, with groceries, utilities, transport and eating out remaining the top categories where consumers believed prices are rising, but less so in Q3.
Looking ahead, a growing number of consumers were confident prices would continue to fall in the December quarter, according to the NAB Consumer Sentiment Survey Q3 2024.
Ahead of the December 2024 mid-year economic and fiscal outlook (MYEFO), Treasurer Jim Chalmers highlighted that the Australian economy outperformed many other nations.
In November, the Treasurer noted that MYEFO growth forecasts were likely to show that the slow growth of the Australian economy was set to continue in the near-term, however, “any growth at all in these circumstances is welcome given many other countries have gone backwards”.
While expecting a gradual recovery in the economy driven by rising real incomes thanks to cost-of-living relief, jobs growth and progress bringing inflation down, the Treasurer noted that a modest recovery was already seen in consumer confidence, with the ANZ-Roy Morgan measure at near two-year highs and showing households were feeling more confident about the next 12 months.
However, according to CreditorWatch data from November, Australian businesses “desperately” needed interest rates to come down, with business failures around the country being on the rise and reaching their highest level since the peak of the pandemic.
In November 2024, the average failure rate for local businesses was at 5.04 per cent, up from 3.97 per cent in October 2023, with the previous high sitting at 5.08 per cent in October 2020.
CreditorWatch data also showed that the failure rate fell steadily after the initial phase of the pandemic but began to rebound in October 2023.
