Consumer confidence declined 0.4 per cent last week. The length of decline now matches the one seen during the first wave of the pandemic when confidence declined for six straight weeks, though the severity of this decline has been milder – at least so far.
This week’s fall was driven by sharp weakness in economic conditions. Sentiment toward financial conditions was mixed. ‘Current finances’ declined by 0.6 per cent, while ‘future finances’ gained 1.6 per cent after three straight falls.
‘Current economic conditions’ declined for the seventh straight week, falling 5.1 per cent, while ‘future economic conditions’ fell 5.3 per cent.
‘Time to buy a household item’ gained 4.9 per cent, the rise coming after falls for five-straight weeks. ‘Inflation expectations’ fell 0.1 percentage points to 3.3 per cent (four-week moving average).
“Confidence fell again last week, though only modestly,” ANZ Head of Australian Economics, David Plank said. “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.”
