Consumer confidence jumps in new year

Consumer confidence increased by 4.9pts last week to 87.4, starting the new year with an increase for the first time since 2018.

'Weekly inflation expectations' dropped sharply from the last print of 2022, falling 0.9ppt to 5.0%. Its moving average for the last four releases fell 0.3ppt to 5.7%.

All the confidence subindices registered gains. 'Current financial conditions' gained 0.2pts, while 'future financial conditions' rose above neutral level of 100 with an increase of 8.3pts.

'Current economic conditions' increased by 6.1pts, while 'future economic conditions' rose by 3.3pts.

'Time to buy a major household item' jumped 6.5pts.

"Consumer confidence jumped 4.9pts to 87.4 last week, reaching its highest level since late September 2022. This was the first new year's jump in confidence since 2018," said ANZ Senior Economist Adelaide Timbrell.

"While homeowners paying off mortgages are still reporting lower confidence than renters and outright owners, average confidence among all three groups rose in the new year.

"Despite the new year jump, confidence is still well below the neutral level (100) and the long-run average of 111.7. Household inflation expectations eased significant by 0.9ppt from the last print of 2022, suggesting cautious optimism about lower inflation through 2023."

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