High-income households see loss of confidence

Monday, 9 Jul 2012

There was a considerable loss of confidence among high-income households last month, latest data from Thomson Reuters reveals.

The latest Surveys for Consumers showed that the number of people expecting their finances to improve over the coming year declined from 37 per cent in May to 24 per cent in June.

Low-income households, on the other hand, were shown to be slightly more optimistic - with potential benefits for the global financial markets.

Surveys of Consumers chief economist Richard Curtin said that the figures are consistent with a slowdown in overall spending.

"The sharp declines among upper income households, however, may have a greater impact on the economy since their spending accounts for a large share of the total," he commented.

This follows comments from Jennifer Westacott, chief executive of the Business Council of Australia, who suggested that a lack of consumer confidence could be due to the success of the country's economy.

She noted that after around 20 years of considerable strength, people are worried about what the future may have in store as current conditions are not sustainable in the long term.