Consumer confidence drops again

Consumer confidence decreased 1.3 per cent last week, dropping to its lowest level since mid-August 2020. Among the major states, confidence increased in NSW and Queensland, while it dropped in Victoria, SA and WA.

• ‘Weekly inflation expectations’ increased by 0.2ppt to 5.3 per cent, while its fourweek moving average remained steady at 5.2 per cent.

• Four of the five confidence subindices dropped. ‘Current financial conditions’ fell 4.4 per cent, while ‘future financial conditions’ dropped 0.4 per cent.

• ‘Current economic conditions’ increased 1.5 per cent, while future economic conditions decreased slightly by 0.2 per cent.

• ‘Time to buy a major household item’ fell 2.7 per cent, dropping 14.7 per cent over the past three weeks.

“Consumer confidence dropped 1.3 per cent last week, its third consecutive weekly loss. Last week’s decline was mainly driven by drops in the subindices that capture the ‘financial situation compared to a year ago’ and whether it is a ‘good time to buy a major household item’. This suggests that cost of living concerns are front and centre for consumers.” ANZ Head of Australian Economics, David Plank said.

“Among the respondents ‘paying off their home loan’, confidence dropped 0.6 per cent, falling a cumulative 14.7 per cent over the past three weeks. Confidence was 2.7 per cent lower for people who ‘own their home’, while it rose 0.5 per cent for people who are ‘renting’.

Household inflation expectations rose 0.2ppt to 5.3 per cent amid higher petrol prices.”

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