Australian weekly consumer sentiment fell last week. The ANZ-Roy Morgan Australian consumer confidence dropped 0.4 percent. The length of fall now matches the one seen in the first wave of the pandemic when sentiment dropped for six consecutive weeks, though the severity of this fall as been milder. This week’s fall was mainly due to sharp softness in economic conditions.
Sentiment toward financial conditions was mixed. ‘Current finances’ dropped 0.6 percent, while ‘future finances’ gained 1.6 percent after three consecutive falls. ‘Current economic conditions’ dropped for the seventh straight week, dropping 5.1 percent, while ‘future economic conditions’ fell 5.3 percent.
‘Time to buy a household item’ rose 4.9 percent, the rise coming after falls for five consecutive weeks. ‘Inflation expectations’ dropped 0.1 percentage point to 3.3 percent.
“Confidence fell again last week, though only modestly. This survey does not capture the effect of the extended Melbourne lockdown, as the announcement came late in the weekend. Despite the decline seen since the onset of the second wave in Victoria, the severity of the fall has been less than in March (at least so far), suggesting Australians have become somewhat accustomed to the ‘new normal’. Fiscal support is also critical, with sentiment toward personal financial conditions holding up much better than expectations about the economy as a whole. The plan to reduce this support may test this relative resilience”, commented ANZ Head of Australian Economics, David Plank.
