Consumer confidence rebounded in June to its highest level since March, before the recent Middle East conflict drove fuel prices up.
The ANZ-Roy Morgan Consumer Confidence Index reached 91.3 points in June, up 4.8 points from 86.5 in May. The index remains 16 points below its January peak and stays in pessimistic territory, with any reading under 100 indicating more consumers are downbeat than optimistic.
ANZ chief economist Sharon Zollner said the recovery appeared closely linked to falling fuel costs. "It's pretty clear that's what caused confidence to plummet, and that's what's causing it to bounce back," she said.
Households showed 10% more optimism about their finances in a year's time, down slightly from 12% in May. The proportion feeling worse off than a year ago eased from negative 25% to negative 23%.
Despite the rebound, an 11% net negative share of households still view current conditions as a poor time for major purchases, though this measure improved by 9 points during the month.
Inflation expectations for the next two years dropped to 4.6% from 5.3% in May, returning to levels seen before oil prices spiked. Outlook for the economy over the coming year improved from negative 36% to negative 23%, the strongest reading since February.
ANZ noted that June card spending data would show whether the improved sentiment translates into actual consumer behaviour.