Consumer confidence bounces back

Confidence gained 1 per cent last week, recovering a bit more than half the loss seen in the prior survey. The bounce was primarily due to strength in the economic conditions subindices, which is not surprising given these were the aspects of the survey that fell sharply in last week’s report.

Current economic conditions gained 6.1 per cent after the fall of 12.9 per cent in the previous reading, while the future economic conditions figure almost reversed its previous loss by gaining 8.6 per cent.

Current finances declined by 5.5 per cent, dropping to its lowest level since June, while future finances gained 0.6 per cent for the third-consecutive increase.

The four-week moving average of ‘inflation expectations’ was down by 0.1 percentage points to 3.9 per cent.

“The weekend’s consumer confidence survey is of considerable interest given the plunge in sentiment in economic conditions recorded over the first weekend of January,” ANZ Head of Australian Economics David Plank said.

“With milder weather seeing the intensity of fires diminish, though not by enough to prevent further tragic loss of life, and some better economic news in the form of building approvals, job vacancies and retail sales, it is not surprising much of the weakness in economic conditions reversed.”

“This was enough to push overall sentiment 1 per cent higher. This offers some hope for some recovery in consumer spending after what appears to be a very subdued Christmas retail season.”

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