Consumer confidence has strengthened further, gaining 5.3 per cent in the first reading for May.
All the subcomponents gained except for ‘Time to buy a major household item’, which fell 2.5 per cent. ‘Current finances’ gained 5.3%, while ‘future finances’ gained 5.9%.
‘Current economic conditions’ rose 2.2 per cent for its fifth straight weekly gain, while ‘future economic conditions’ gained 13.7 per cent.
The four-week moving average for ‘inflation expectations’ fell 0.3 percentage points to its lowest ever level of 3.4 per cent, with the weekly reading dropping to 3.2 per cent.
“The strength in confidence last week was encouraging. Overall sentiment is now around the levels seen during the global financial crisis, while a number of the sub-indices have returned to levels that, while still low, are within the previous historical experience.”
“We think the gain over the past week is predominantly attributable to the further easing of COVID-19 restrictions and optimism surrounding the daily new cases figure.”
“There is a long way to go before sentiment gets to levels where people can be said to be optimistic, however. The weakness in inflation expectations continues and could be a lasting feature of the pandemic.”
