• Consumer confidence dropped 2.5 per cent last week, following the 1.2 per cent drop in the previous week. Amongst the major states, confidence dropped sharply in NSW, Victoria and Queensland, declined modestly in Western Australia and increased in South Australia.
• ‘Weekly inflation expectations’ increased 0.1ppt to 6.0 per cent, the first time inflation expectations registered a ‘6’ since late March.
• All five sub-indexes registered losses. ‘Economic conditions next year’ had the sharpest slide, down 5.6 per cent, followed by ‘Financial situation next year,’ down 2.5 per cent. ‘Financial situation compared to a year ago’ softened 0.6 per cent, while ‘Economic conditions in the next five years’ fell 2.3 per cent.
• ‘Time to buy a major household item’ decreased by 1.8 per cent.
“Consumer confidence declined for a second straight week, driven by concerns about both the economic outlook and household finances.” ANZ Senior Economist, Felicity Emmett said.
“The RBA’s 50bp rate hike last week weighed on sentiment, with confidence falling for those people paying off a mortgage by a sharp 5.4 per cent. This continues the trend in place since late April when the high March quarter inflation report brought forward rate hike expectations.Since then, confidence amongst mortgage holders has fallen 25 per cent, while confidence for renters is down just 4 per cent.
“Inflation expectations lifted as petrol prices hover near record highs. Global oil prices dropped last week, boding well for Australia’s retail petrol prices over the coming weeks.”
