FX.co ★ NZ Consumer Confidence Drops as Recovery Stalls in July

In July, the ANZ-Roy Morgan Consumer Confidence index decreased to 94.7 from 98.8 in June, maintaining its recent erratic pattern and highlighting ongoing economic fragility. This drop suggests a tepid rebound from last year's recession, with weakening activity indicators and potential declines in GDP and employment in the June quarter. Consumer spending remains lackluster, as the proportion of households considering it a good time to purchase major items decreased to -8, while the housing market struggles to gain momentum. Inflation expectations climbed to 5.1%, the highest level since April 2023, largely driven by increasing costs in essential areas such as food, insurance, and utilities. Additionally, perceptions of personal finances and overall economic conditions worsened, further dampening future sentiment. However, there could be some relief in the months ahead from easing mortgage rates and robust farm incomes. These factors might lay the groundwork for the Reserve Bank of New Zealand (RBNZ) to implement rate cuts to assist in the recovery.