Consumer confidence edges higher

Confidence gained for the eighth straight week and is up 42 per cent from its low point in March, when fears about the pandemic were at the most extreme.

Financial conditions indices diverged. ‘Current finances’ declined 1.8 per cent, while ‘future finances’ gained 3.2 per cent and is now only a touch below average.

Economic conditions indices also diverged with ‘current economic conditions’ gaining 0.3 per cent, while ‘future economic conditions’ declined 2.4 per cent.

‘Time to buy a major household item’ strengthened further, up 2.5 per cent. The four-week moving average for ‘inflation expectations’ declined 0.1 per centage point to 3.3 per cent, a new historic low.

“Confidence strengthened further last week, albeit modestly,” ANZ Head of Australian Economics, David Plank, said.

“While still below average, sentiment has recovered strongly from its March low and is now only around 15 per cent below its level at the end of February.”

“Government measures and signs the job market is stabilising seem to be playing a key part in the recovery of the index despite recent concerns over trade with China and weak retail sales.”

“These factors, and the move in Australia’s credit rating to a negative outlook by Fitch, may explain why expectations about the ‘future economic outlook’ fell.”

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