Consumers are feeling a little more upbeat heading into the end of the year as home prices lift and the interest rate hiking cycle draws to a close.
Confidence levels have been hovering well below the long run average as tracked each week by Roy Morgan and ANZ’s consumer survey.
The high cost of living and interest rate hikes have been knocking household finances around and souring the mood.
The one point uptick in consumer confidence to 81.8 index points last week was driven by outright homeowners and those still paying off their homes.
ANZ senior economist Adelaide Timbrell said gains in the residential property market and the possible stabilisation of interest rates could be improving sentiment for the two housing cohorts.
“There are limits to the overall increase in confidence though, as households continue to face the impacts of rapid inflation,” Ms Timbrell said.
She said renter confidence had been trending down as low vacancy rates drove rents higher.
Strong pay growth has been helping households manage rising costs but a separate index from Employment Hero suggests wages paid by small and medium-sized businesses are softening.
The monthly median hourly rate decreased by 0.3 per cent from October to November, the first outright decline in six months.
The fall followed several months of slower wage growth.
Employment Hero co-founder and chief executive officer Ben Thompson said the data was indicative of an economy cooling off.
“And it is likely mid-next year, we’ll see SMEs cutting back on hiring and growth plans as the economy potentially enters a small recession,” he said.