Australia ANZ-Roy Morgan consumer confidence falls 2.5 pct last week, partially unwinds gains over the previous two weeks

Australia’s ANZ-Roy Morgan consumer confidence fell 2.5 percent last week to 116, partially unwinding gains over the previous two weeks. The fall was broad-based, with households particularly pessimistic about current financial conditions.

Views towards current economic conditions declined 3.5 percent last week, partially reversing the previous 5.1 percent rise. Sentiment around future conditions slipped 1.9 percent. The future conditions index still remains well above the levels seen for most of 2017, though it has slipped below its long-run average.

Households’ pessimism towards financial conditions extended last week’s move, with the current and future subindices falling 5.5 percent and 1.0 percent, bringing them to 5 and 14-week lows respectively.

Sentiment around the ‘time to buy a household item’ declined 1.0 percent more than reversing the 0.7 percent rise in the prior week. Inflation expectations edged up to 4.6 percent on a four-week moving average basis, as the latest reading came in at 4.7 percent.

"We are, however, cognisant of risks to the downside. The recent strength in household spending seems unlikely to be repeated, given that wage growth is yet to pick up substantially and debt remains high. Households appear to share this concern – views towards future financial conditions have fallen from their peak in January and are approaching their long-term average," ANZ Research commented in its report.

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