Consumer confidence almost unchanged

Consumer confidence was practically unchanged rising only 0.2 per cent last week. Confidence dropped in Victoria and NSW as daily COVID cases remained quite elevated in both states.

‘Weekly inflation expectations’ rose 0.2ppt, returning to its recent high of 4.7 per cent. The four-week moving average rose 0.1ppt to 4.6 per cent.

The subindices registered mixed results. ‘Current financial conditions’ dropped 3.0 per cent, while ‘future financial conditions’ gained 1.9 per cent.

‘Current economic conditions’ improved 2.2 per cent and ‘future economic conditions’ were up 1.6 per cent.

‘Time to buy a major household item’ dropped 1.6 per cent.

“Consumer confidence barely moved last week, rising just 0.2 per cent.” ANZ Head of Australian Economics, David Plank said.

“Last week’s labour market data revealed some softness in the economy with employment falling by 146k in August due to the prolonged lockdowns. This might have dampened sentiment, which fell 4.9 per cent in NSW and 1.1 per cent in Victoria. But confidence rose 7.3 per cent in Queensland and 6.7 per cent in South Australia, making up for the fall.”

“Falling COVID case numbers in NSW plus Victoria’s plan for opening may boost confidence over the coming week. A notable development was the jump in inflation expectations to 4.7 per cent for a second time this month. This could be due to the increase in retail petrol prices in the past two weeks.”

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