Consumer confidence: Confidence tumbles on RBA downgrade

  • ANZ-Roy Morgan Australian Consumer Confidence dropped by 3.4% last week, with all the confidence subindices falling. The drop took the index to a three-month low.
  • Current financial conditions fell sharply, falling by 7.1%. Sentiment toward current financial conditions is back to where it was in November, but still quite some way above the long-run average. Future financial conditions fell by a more subdued 1.6%.
  • Current economic conditions fell by 3.2%, its first fall after three straight weekly gains, while future economic conditions fell by 3.8%.
  • The ‘time to buy a household item’ index fell 1.6%, its fourth straight weekly loss and taking it back to where it was at the end of October.

ANZ’s Head of Australian Economics, David Plank, commented:

“Consumer confidence took a beating last week, most likely on the back of the RBA’s downgrade to its economic outlook. The fall reversed all the gains and then some since the weak reading seen at the start of this year. Weak retail sales and building approvals data may also have negatively impacted sentiment. Confidence still remains above the long-run average, however, as does the key current financial conditions sub-index. So we aren’t giving up on the consumer just yet.”

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