Consumer confidence dropped 1.9 per cent last week, reversing the gains of the week before. A large fall in confidence in WA and smaller falls in NSW, Queensland and SA drove the drop, while Victoria recorded a small gain.
‘Weekly inflation expectations’ rose 0.1ppt to 4.8 per cent with its four-week moving average unchanged at 4.9 per cent.
‘Current financial conditions’ plunged 7.8 per cent and ‘future financial conditions’ fell 3.5 per cent. Both the subindices were at their lowest level since late 2020 when the economy was recovering from the second wave of the pandemic.
‘Current economic conditions’ softened 0.3 per cent, while ‘future economic conditions’ were up 2.4 per cent.
‘Time to buy a major household item’ increased 0.7 per cent.
“Consumer confidence decreased 1.9 per cent last week, falling back below neutral. This coincided with much publicised commentary from the RBA Governor that there was now a “plausible scenario” in which the cash rate went up in 2022. That is a big shift from Lowe’s previous statements that interest rates may not go up until 2024.” ANZ Head of Australian Economics, David Plank said.
“Ratings of both ‘current’ and ‘financial’ conditions dropped to levels last seen in late 2020.”
“Among the states, WA suffered the biggest loss, with sentiment 8.1 per cent lower, which could be influenced by COVID numbers and bushfires close to the towns of Bridgetown and Denmark. Confidence also dropped in NSW (-1.7 per cent), Queensland (-3.4 per cent) and SA (-1.9 per cent), while it rose in Victoria (+1.5 per cent).”
