Consumer confidence pulls back

Consumer confidence fell 0.9 per cent last week, primarily due to the 6.4 per cent fall seen in the ‘Time to buy a major household item’ sub-index.

Financial conditions were mixed with ‘current finances’ down by 1.5 per cent, while ‘future financial conditions’ gained 3.7 per cent.

Economic conditions were also mixed. ‘Current economic conditions’ rose 1.6 per cent, while ‘future economic conditions’ fell 1.2 per cent.

The four-week moving average of ‘inflation expectations’ was up 0.1 percentage point to 4.0 per cent.

“Momentum fizzled out this week after two successive weekly gains,” ANZ Head of Australian Economics, David Plank said. “A delayed response to the soft GDP result and weak retail sales may be at work, as well as the news flow around bushfires and associated smoke haze.”

“The weakness seen in the ‘time to buy a household item’ sub-index was almost enough to take it to its lowest level since the global financial crisis. It seems the turn in the housing market has not yet flowed through to sentiment around household items.”

“We note consumer confidence is not the be all for financial condtions. The financial wellbeing of Australians is holding up better.”

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