Cameron Bagrie.
Consumer confidence has fallen for the third time this year in the ANZ-Roy Morgan survey and it is at its lowest level since October last year.
But ANZ chief economist Cameron Bagrie said it remained high by historical standards, and if anything he would have expected a bigger effect from the two interest rate increases the Reserve Bank has delivered.
The consumer confidence index dropped to 128 from 134 in April. Any level above 100 indicates more optimists than pessimists.
"It's pretty marginal in the overall scheme of things," Bagrie said.
"There has been a levelling off but until I see four or five successive movements in the same direction I'm coy about making sweeping statements about what it means."
While interest rates were rising, households still had much to smile about, he said, including employment growth, a high dollar making imports cheaper and the fact that a strong economy would invariably be reflected in wage growth.
The housing market was slowing, but from a gallop to a canter, and consumers would be more influenced by still-rising house prices than by falling turnover.
Falling export dairy prices would affect business sentiment rather than consumer sentiment and the Budget came late in the survey period.
It's pretty marginal in the overall scheme of things. There has been a levelling off.
Of the five questions used to gauge sentiment, the biggest fall recorded was in whether it was a good or bad time to buy a major household item.
A net 36 per cent of respondents thought it was a good time -- a high reading but down from a net 47 per cent last month.
People were more upbeat about whether they would be better off financially this time next year than about their financial progress over the past year, although both readings were down, by four and three points respectively.
People remained more confident about the next five years than the year ahead, but less so than last month, by four and six points respectively.
Expectations of consumer price inflation and house price inflation both continued to drop from their highs last December.
The largest decline in confidence was among 34- to 49-year-olds who dropped 10 points to 127, perhaps reflecting a higher concentration of mortgages in that age bracket.
Only teenagers were more optimistic than last month.
Confidence fell more in Auckland and Wellington than it did nationwide, by eight points instead of the six recorded nationally.
Canterbury fell four points, and is still the most confident region, while the South Island excluding Canterbury was the only region to record a rise, of two points.