Consumer confidence edges down

Confidence fell 0.6 per cent last week, reversing a bit over half the prior week’s increase. This continues the recent sawtooth pattern. Confidence remains well below average.

In a repeat of last week’s pattern, there were largely oversetting moves within the sub-components of financial and economic conditions. ‘Current financial conditions’ dropped 3 per cent, while ‘future financial conditions’ was up 3.8 per cent.

In a similar pattern, the 4.1 per cent drop in ‘current economic conditions’ didn’t quite offset the 5.3 per cent lift in ‘future economic conditions’.

‘Time to buy a major household item’ fell 5 per cent, to its lowest level since mid-December. The four-week moving average of ‘inflation expectations’ was unchanged at 4.1 per cent.

“Consumer confidence has displayed a sawtooth pattern in recent weeks, with offsetting moves in many of the components leading to a lack of overall direction,” ANZ Head of Australian Economics David Plank said.

“Last week’s upbeat assessment of the outlook by the RBA may have buoyed ‘future economic conditions’, which rose to their highest level since mid-November.”

“‘Future financial conditions’ also rose sharply, jumping to their highest level since early November. Sentiment around current conditions, though, was lower, as were views on whether it was ‘time to buy a major household item’.”

“Heavy rain and floods in parts of the east coast and the coronavirus epidemic may have contributed to the weakness in these aspects of the survey. Overall, consumers are cautious, and it is difficult to see this lessening any time soon.”

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