Confidence in economic conditions surges

Consumer confidence rose 2.3 per cent on the back of a sharply improved assessment for both current and future economic conditions. The other details were mixed.

‘Current financial conditions’ rose 2.4 per cent, but ‘future financial conditions’ weakened 1.7 per cent. ‘Current economic conditions’ surged 9.1 per cent, and ‘future economic conditions’ jumped 5.9 per cent.

The ‘Time to buy a major household item’ index fell 2.0 per cent. The four-week moving average for inflation expectations picked-up 0.1 percentage points to 3.7 per cent.

“The improvement in consumer confidence comes on the back of further good news on the labour market front, notably the drop in the unemployment rate to 6.6 per cent in December,” ANZ Head of Australian Economics David Plank said.

“The absence of community transmitted COVID-19 cases for a number days and the relaxation in border rules has likely also supported confidence.”

“Sentiment about current and future economic conditions has surged and both are now above their long-run averages, for the first time since mid-2019.”

“Weekly inflation expectations accelerated 0.2 percentage points. This could be on back of the up-tick in petrol prices. The national average retail petrol price rose more than 14 cents in the week to January 24, ahead of the long weekend, according to the Australian Institute of Petroleum.”

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