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Australian consumer confidence rose for the first time since late June last week, albeit by the smallest of margins.

The latest ANZ-Roy Morgan consumer confidence index edged up by 0.5% to 115.5, leaving it above its long-run average of 112.8.

The increase was driven by an improvement in views towards the economic outlook. Perceptions towards the 12-month economic outlook rose by 1.5%, slightly outpacing the 1.0% gain seen looking five years ahead.

That improvement offset weaker readings on consumer finances with gauges measuring current and expected finances looking a year ahead slumping by 2% and 1.1% respectively.

ANZ notes that the “indicator of current finances has declined by 5.3% over the past five weeks, suggesting that heightened uncertainty and possibly the slowdown in employment growth have weighed on household sentiment”.

Curiously, the declines came despite continued strength in Australian house and stock prices, two of the largest stores of wealth for households.

Further clouding the deterioration in sentiment towards current finances, the final component of the index — whether now was a good time to buy a major household item — jumped by 3%, largely recapturing the declines recorded previously.

Felicity Emmett, head of Australian economics at ANZ, put the improvement in confidence levels down to the strong performance of Australia’s stock market and reduced financial volatility. However, she is keeping a close eye on the deterioration in the survey’s measures on personal finances, especially given the relationship it has to household consumption levels.

“There has been some deterioration in consumers’ views towards their finances – which likely reflects a combination of higher global uncertainty and some slowing in employment growth domestically,” says Emmett. “As consumers’ views on their finances tend to be a good predictor of spending, this weakening (if it continues) could pose some downside risk for consumer spending going forward.”

The chart below, supplied by ANZ, looks at the relationship between the survey’s current finances subindex against changes in employment growth.

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