Consumer confidence plunged 4.8 per cent last week, falling to its lowest level since early September 2020. Confidence fell across all states and territories.
• ‘Weekly inflation expectations’ rose 0.4ppt to 6.0 per cent as petrol prices continued to surge. Its four-week moving average rose 0.2ppt to 5.5 per cent.
• ‘Current financial conditions’ decreased by 5.4 per cent and ‘future financial conditions’ fell 4.6 per cent. Both indices were at their lowest levels since July and April 2020 respectively.
• ‘Current economic conditions’ declined for a fifth straight week. Dropping by 8.5 per cent it fell to its lowest since October 2020. ‘Future economic conditions’ bucked the overall trend and increased by 1.1 per cent.
• ‘Time to buy a major household item’ dropped by 6.9 per cent.
“Consumer confidence dropped 4.8 per cent last week. It is now at its lowest since Victoria’s second COVID wave in early September 2020.” ANZ Head of Australian Economics, David Plank said.
“The continued rapid increases in petrol prices saw inflation expectations rise to 6.0 per cent. Increasing petrol prices have had a sharp impact on households’ confidence for both ‘current’ and ‘future financial conditions’ with the two subindices dropping 10.3 per cent and 8.4 per cent respectively over the last two weeks.”
“We noted last week that the weakness in consumer sentiment is at odds with the strength in employment and reflects pressure on household budgets as nominal wage growth lags the jump in inflation. The weakness in consumer confidence presents a growing near-term risk to the outlook for household spending.”
