Australians are feeling grim about the state of the national economy, with two surveys out on Wednesday indicating interest rate rises are higher energy costs are weighing on confidence.
Consumer sentiment fell in June to its weakest level since mid-2016, the latest Westpac-Melbourne Institute survey shows, while the weekly ANZ-Roy Morgan Consumer Confidence Index released on Wednesday showed optimism flatlined after three weeks of rises.
The latest figures highlight continued weakness in household incomes, which have barely outpaced inflation over the past four quarters, Westpac senior economist Matthew Hassan said.
"Recent increases in mortgage interest rates and electricity costs have likely added to pressures," Mr Hassan said.
Westpac's consumer confidence around the wider economy fell sharply in June, with the view of economic conditions over the next 12-months down 4.8 per cent.
Mr Hassan said the March quarter economic growth figures would have also had a hand in the weak result.
Data released on June 7 indicated that Australia's gross domestic product slowed to 0.3 per cent in the March quarter, taking annual growth to 1.7 per cent - the weakest pace since the global financial crisis.
While the final result showed a gain, it was soft compared to historical standards.
"Ahead of the release, many commentators feared the economy may have contracted in the quarter," Mr Hassan said.
ANZ's head of Australian economics David Plank said consumer confidence had stalled on the back of the first quarter figures with expectations of current economic conditions down 5.2 per cent.
The Westpac-Melbourne Institute index dropped to 96.2 for June, down from 98.0 points in May.
And the ANZ-Roy Morgan Consumer Confidence Index was unchanged at 112.9 for the week to June 11, following three consecutive weeks of rises.
Mr Plank said the headline number masked significant changes in the sub-indices of the survey.
Views of future economic conditions continued to slide with a 2.6 per cent decline, reaching the lowest level since September 2015.
But consumers' forward view of their own finances remained relatively positive.
Westpac revealed a reading at 102.8 points - surpassing the 100 mark which indicates net optimism, while ANZ's reading jumped 9.4 per cent to its highest level in 14 weeks.
"This is encouraging in terms of the outlook for household consumption," Mr Plank said.
He added that strength in business conditions, along with moderate growth in the ANZ's job advertisements series, suggest that employment growth should continue at a decent pace.
"This should broadly support confidence over the coming months," he said.
