How confident are you about your future?
The world's Geopolitical problems and local issues such as inflation, the specter of rising interest rates, and our local floods have made people feel less secure.
In fact, consumer confidence plunged 4.8% last week, falling to its lowest level since early September 2020.
ANZ Bank report that confidence fell across all states and territories.
- ‘Weekly inflation expectations’ rose 0.4ppt to 6.0% as petrol prices continued to surge.
- ‘Current financial conditions’ decreased by 5.4% and ‘future financial conditions’ fell 4.6%. Both indices were at their lowest levels since July and April 2020 respectively.
- ‘Current economic conditions’ declined for a fifth straight week. Dropping by 8.5% it fell to its lowest since October 2020. ‘Future economic conditions’ bucked the overall trend and increased by 1.1%.
- ‘Time to buy a major household item’ dropped by 6.9%.
ANZ Head of Australian Economics, David Plank, commented:
Consumer confidence dropped 4.8% last week.
It is now at its lowest since Victoria’s second COVID wave in early September 2020.
The continued rapid increases in petrol prices saw inflation expectations rise to 6.0%.
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Increasing petrol prices have had a sharp impact on households’ confidence for both ‘current’ and ‘future financial conditions’ with the two subindices dropping 10.3% and 8.4% respectively over the last two weeks.
We noted last week that the weakness in consumer sentiment is at odds with the strength in employment and reflects pressure on household budgets as nominal wage growth lags the jump in inflation.
The weakness in consumer confidence presents a growing near-term risk to the outlook for household spending.
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