Consumer confidence modest recovery partially reverses

Consumer confidence dropped 1.2 per cent last week, after two weeks of modest gains. Among the major states, confidence increased only in Queensland, while it dropped in NSW, Victoria, SA, and WA.

• ‘Weekly inflation expectations’ increased 0.2ppt to 5.9 per cent, while its fourweek moving average rose 0.1ppt to 5.8 per cent.

• Four of the five subindices registered losses. ‘Current financial conditions’ dropped 1.2 per cent, its eighth consecutive weekly decline. ‘Future financial conditions’ was practically unchanged with a decrease of 0.1 per cent.

• ‘Current economic conditions’ increased 3.0 per cent after falling 18.8 per cent over the previous four weeks. ‘Future economic conditions’ fell 1.6 per cent.

• ‘Time to buy a major household item’ decreased by 5.4 per cent.

“Consumer confidence decreased 1.2 per cent last week, driven by a 4ppt increase in the number of respondents who think it is a ‘bad time to buy’ a major household item. A possible reason for this could be the conclusion of End of Financial Year sales.” ANZ Head of Australian Economics, David Plank said.

“Expectations of a further increase in the interest rate by the RBA at its meeting today could be another reason behind the dampened sentiment. Household inflation expectations rose 0.2ppt to 5.9 per cent last week, exactly reversing its fall the week before.”

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