• Consumer confidence decreased 2.8 per cent last week, falling to its lowest level since early August. Among the mainland states, confidence dropped in NSW, Victoria, Queensland and SA, while it increased in WA.
• ‘Weekly inflation expectations’ surged 0.5ppt to 6 per cent, while its four-week moving average rose 0.1ppt to 5.5 per cent.
• Four of the five confidence subindices declined. ‘Current financial conditions’ dropped 1 per cent, its third consecutive weekly decline. ‘Future financial conditions’ decreased 3.6 per cent, falling below the neutral level of 100 for the first time since early August.
• ‘Current economic conditions’ rose slightly by 0.6 per cent after dropping 10.4 per cent over the previous two weeks. ‘Future economic conditions’ fell 2.6 per cent.
• ‘Time to buy a major household item’ lost 6.2 per cent after a 4.4 per cent decline the week before.
“Consumer confidence plunged 2.8 per cent as inflation expectations jumped to its highest since late July when petrol prices last peaked.” ANZ Head of Australian Economics, David Plank said.
“The weaker AUD along with an uptick in petrol prices over the past couple of weeks likely led to the surge in household inflation expectations to 6 per cent. This weighed heavily on consumer sentiment, with the subindex that captures whether ‘it is a good time to buy a major household item’ dropping 6.2 per cent. Very weak consumer confidence has not, so far, translated into lower household spending. But the longer confidence remains so low the greater the prospect that consumers become more cautious, especially with household wealth going backwards due to lower house and equity prices.”
