Consumer confidence falls again

Consumer confidence declined 2.4 per cent last week. This was its seventh weekly decline, longer than the six weeks of continuous decline seen during the first wave of the pandemic.

The current decline has been less severe, however, as the index has fallen a bit more than 11 per cent over these seven weeks compared to the 40 per cent decline seen in the first wave.

Financial conditions were mixed, with ‘current finances’ gaining 2.7 per cent and ‘future finances’ declining 1.9 per cent.

Economic conditions were also mixed. ‘Current economic conditions’ plunged by 8.2 per cent, its eighth weekly decline. This sub-index is now down by 30 per cent over the past seven weeks compared to the fall of 60 per cent in the first wave.

‘Future economic conditions’ ended on a positive note, gaining 2.2 per cent. ‘Time to buy a household item’ declined 8.6 per cent. ‘Inflation expectations’ was stable at 3.3 per cent (four-week moving average).

“The move to Stage 4 restrictions in Melbourne put further downward pressure on sentiment last week, with confidence falling to its lowest level since the last weekend of April,” ANZ Head of Australian Economics David Plank said.

“Not surprisingly, confidence is weakest in Melbourne. The resilience of sentiment toward financial conditions continues to be a feature of the survey, but only in a relative sense as it is still low in absolute terms and speaks to a likely reluctance on the part of households to spend.”

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