Consumer Confidence improves further

Consumer confidence rose 3.7 per cent last week. Among the major states, confidence increased in NSW, Queensland, and WA, while it was unchanged in Victoria and fell in SA.

• ‘Weekly inflation expectations’ decreased 0.2ppt to 5.7 per cent, while its fourweek moving average was unchanged at 5.7 per cent.

• The subindices registered mixed results. ‘Current financial conditions’ dropped 1.6 per cent, after a fall of 13.9 per cent over the last seven weeks. ‘Future financial conditions’ gained 5.5 per cent after a 5.1 per cent rise the week before.

• ‘Current economic conditions’ decreased 2.5 per cent, its fourth straight weekly decline. ‘Future economic conditions’ rose 6.0 per cent after a 7.1 per cent fall over the previous three weeks.

• ‘Time to buy a major household item’ increased by 9.8 per cent.

“Consumer confidence increased 3.7 per cent last week, possibly helped by the state budget initiatives in NSW and Queensland.” ANZ Head of Australian Economics, David Plank said.

“Confidence increased by 4.3 per cent and 5.2 per cent in NSW and Queensland respectively. Household inflation expectations dropped 0.2ppt to 5.7 per cent, despite an increase in the average petrol price over the week. The subindex capturing whether it is a good ‘time to buy a major household item’ has jumped 14.2 per cent over the past two weeks and was the biggest driver of last week’s gain in confidence.

The improvement in sentiment doesn’t mask the fact that it remains exceptionally weak, with all subindices well below neutral. We expect this week’s retail figures for May to confirm that spending is holding up despite low confidence.”

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