Consumer confidence marches ahead

Consumer confidence has strengthened further, gaining 5.3 per cent in the first reading for May.

All the subcomponents gained except for ‘Time to buy a major household item’, which fell 2.5 per cent. ‘Current finances’ gained 5.3%, while ‘future finances’ gained 5.9%.

‘Current economic conditions’ rose 2.2 per cent for its fifth straight weekly gain, while ‘future economic conditions’ gained 13.7 per cent.

The four-week moving average for ‘inflation expectations’ fell 0.3 percentage points to its lowest ever level of 3.4 per cent, with the weekly reading dropping to 3.2 per cent.

“Confidence gained further last week despite the shocking news that almost 600,000 Australians lost employment in April,” ANZ Head of Australian Economics David Plank said.

“Massive fiscal stimulus and continued easing of pandemic induced restrictions are providing an important offset to all the COVID-19 related gloom.”

“As a result, ‘future financial conditions’ is now only around 5 per cent below the long run average, though overall sentiment is

closer to 20 per cent below average.”

“With more good news about the easing of restrictions likely, it seems reasonable to expect further gains in sentiment. Consistent with this, ANZ-observed card-spending data shows household spending is holding up.”

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