Euro woes hit consumer confidence

Consumer confidence is slipping in the face of the ongoing European debt crisis, even though people are feeling better off financially than three months ago, according to a  Westpac McDermott Miller survey.

The survey shows the consumer confidence index fell to 99.9, down 2.5 points from March's 102.4.

"Today's survey reveals a sharp contrast between how people feel about the here
and now, and their concerns for the future," said Westpac chief economist Dominick Stephens.

"Households have become more worried about the economy and how that might affect them. But at the same time they say they're feeling financially better off than three months ago, and more willing to spend."

"That seems a fair reflection of what's actually happened over the past three months," said Mr Stephens.

"On the one hand the European crisis has been casting an increasingly dark shadow
over the global economy. But the same time petrol prices have eased and mortgage rates have fallen to record lows, effectively putting more money in people's pockets."

"Importantly, it's how people feel about today that seems to be the better guide to how much they will actually spend. In that sense today's survey is a reasonably positive signal for retail spending," said Mr Stephens.

"Of course that could still change depending on what actually happens in Europe."

- © Fairfax NZ News