Australia’s ANZ-Roy Morgan consumer confidence falls 2.1 pct last week, inflation expectations inch higher

Australia’s ANZ-Roy Morgan consumer confidence fell 2.1 percent last week after gaining 4.2 percent in the previous reading. All the sub-indices fell except the ‘time to buy a major household item’.

Financial conditions sub-indices were down significantly and have been volatile for the last few weeks. Current finances were down 4.7 percent while future finances lost 5.0 percent.

Current economic conditions fell 1.7 percent, while future economic conditions lost 1.1 percent after gaining 4.2 percent in the previous reading.

‘Time to buy a household item’ continued to recover after falling to a 10-year low in recent weeks, although it remains below its long term average. Inflation expectations inched higher by 0.1 ppt to 4.1 percent.

"Last week’s bounce in ANZ-Roy Morgan consumer confidence wasn’t sustained and sentiment is now back below the long term average. Ongoing concerns about the medium term outlook are weighing down sentiment, although consumers continue to feel okay about their current financial circumstances. This divergence in thinking possibly explains the modest bounce in retail sales reported last week: consumers recognise the impact of tax and interest rate cuts on their budgets, but are worried about the outlook, and so unwilling to splash the cash. The RBA is likely to be disappointed about the inability for either confidence or spending to lift materially despite significant monetary and fiscal stimulus," said Felicity Emmett, ANZ’s Senior Economist.