Consumer confidence edges up

Cosumer confidence edged up a touch last week, reversing the prior week’s decline. It remains well below average.

Overall financial conditions were little changed, with offsetting moves in ‘current’ and ‘future’ finances.

We also saw offsetting moves in economic conditions. ‘Current economic conditions’ gained 2.1 per cent, while ‘future economic conditions’ declined 2.5 per cent lastweek.

‘Time to buy a major household item’ gained 2.7 per cent compared to a decline of 2.4 per cent previously. The four-week moving average of ‘inflation expectations’ was up by 0.1 percentage points to 4.0 per cent.

The weekly reading rose to 4.2 per cent, its highest level since early September, perhaps reflecting the lift in headline inflation reported in the December 2019 CPI report.

“Broadly stable consumer confidence in the face of news about the coronavirus, albeit at a level well below average, provides some comfort for the outlook,” ANZ Head of Australian Economics David Plank said.

“The decisive policy action taken by the Government to protect the health and wellbeing of Australian citizens may be seen as a positive development that provides at least some offset to community concerns about the health and economic consequences of the virus.”

“The coming week will be dominated by Reserve bank of Australia commentary and some key data, not least the December retail sales figures, which are expected to confirm weak Christmas spending.”

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