Consumer still subdued

• 2018 consumer spending has been facing higher fuel costs, a stagnant labour market, and higher taxes. We expect this to be reflected in the consumer confidence data when the Bureau for Economic Research (BER) consumer confidence data for Q3:18 is released this week. The correlation between consumer confidence and household consumption expenditure (HCE) will therefore shed light on consumer health.
• Since 2011, consumer sentiment has been very subdued due to slow economic growth and pervasive political uncertainty. However, positive political developments late last year saw confidence pick up in H1:18 — but this has failed to translate into robust spending over the same period, particularly for durable goods.
• The Bloomberg consensus is for consumer confidence to have moderated to 15 pts in Q3:18, from 22 pts in Q2:18.

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