Consumer confidence slips on financial concerns

Consumer confidence declined 0.7 per cent last week, driven by weakness in financial conditions.

‘Current finances’ fell 4 per cent compared to the prior week, while ‘future finances’ declined 5.2 per cent – its second straight weekly loss.

In contrast to the weakness in financial conditions, confidence in economic conditions rose. ‘Current economic conditions’ gained 2.4 per cent, building on the strong rise of 6.5 per cent in the previous reading. ‘Future economic conditions’ rose 2.7 per cent.

‘Time to buy a major household item’ gained 1.7 per cent, after declining for two successive weeks. The four-week moving average for ‘inflation expectations’ was stable at 4 per cent.

“A sharp rise in unemployment and underemployment may explain the fall in ANZ Roy-Morgan Australian Consumer Confidence index last week. Overall confidence is up from its recent low, though still well below average,” ANZ Head of Australian EconomicsDavid Plank said.

“The decline in confidence was due to weakness in the financial conditions subcomponent. It is possible news about rising labour market has slack has people concerned about their personal finances.”

“Sentiment toward ‘current finances’ is down 7.5 per cent from its early January high, though still a touch above average.”

“In contrast to the weakness in financial conditions, sentiment toward economic conditions was higher. It is still well below that on financial conditions however, although the gap between the two has narrowed.”

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