New Zealand: Consumer confidence worsens in February
Latest reading: Consumer confidence indicator fell to 100.1 in February, following January’s 107.2. The latest reading was above the threshold of 100 that separates optimistic from pessimistic sentiment.
In February, households grew less optimistic about the general economic situation in the next 12 months (-7.5 vs -0.7 in January), the economic outlook 5 years ahead (+8.1 vs +11.9 in January), their willingness to make large purchases (-4.1 vs +1.0 in January) and their personal financial situation over the next 12 months (+20.1 vs +29.4 in January).
Panelist insight: On the data, ANZ analysts said:
“Consumer confidence gave up much of its recent gains in February as the impact of tighter financial conditions (e.g. higher fixed mortgage rates) following recent upside inflation surprises appears to have weighed. That said, recoveries seldom happen in a straight line and the upward trend across many of these indicators remains intact. These data align with our expectation that while the economic recovery is underway and broadening, medium-term prospects are not exactly gung-ho. While there is still residual support coming through from past monetary easing, stagnant house price momentum, a loose labour market, and lingering cost-of-living pressures mean it’s still tough going out there for many households.”