• ANZ-Roy Morgan Australian Consumer Confidence was down last week, falling 1.3%, despite the tax cuts set out in the Budget. Consumer confidence is just above its long-run average.
• Current finances were down 1.7%, while future finances gained by the same amount, thus having a neutral effect on the combined index.
• Current economic conditions rose by 0.7%, building on the big jump of 8.1% in the previous reading. Future economic conditions were up by a modest 0.8%, though this was the fourth straight weekly gain.
• The ‘time to buy a household item’ fell by 7.4%. Four-week moving average inflation expectations were stable at 4.0%. The weekly reading rose to 4.3%, more than reversing the prior week’s large decline.
ANZ Senior Economist, David Plank, commented:
“The fall in confidence last week would be seen as disappointing in Canberra given the near-term boost to household incomes delivered in the Budget. Given the usual volatility in the weekly data, we don’t believe the decline indicates a negative response to the Budget. Rather, it suggests the announcements failed to provide a boost. On a definitely positive note, the sharp decline in the weekly inflation expectations reading in last week’s numbers more than reversed this week. This will be some comfort to the RBA.”
