Consumer confidence fell 1.7 per cent last week to its lowest level in more than four years. A drop in confidence at the start of the year is unusual and almost certainly reflects the impact of the catastrophic bush fires over the weekend.
Consistent with this, the weakness in confidence was due to a big drop in the economic outlook, while sentiment toward personal financial circumstances actually rose.
‘Current economic conditions’ were down by a massive 12.9 per cent while ‘future economic conditions’ fell 8.1 per cent. Current economic conditions are at their lowest level since the global financial crisis, while sentiment toward the future economic outlook is at its lowest level since 1994.
In contrast, financial conditions gained. ‘Current finances’ rose 4 per cent while ‘future finances’ were up 0.3 per cent.
The ‘Time to buy a household item’ gained 4.8 per cent, recovering from a fall of 6.4 per cent seen in the last reading of the previous year. The four-week moving average of ‘inflation expectations’ was stable at 4.0 per cent, though weekly readings saw a sharp fall, which should result in a softer reading looking forward.