Consumer confidence fell 4.2 per cent last week. This was the third consecutive fall, for a cumulative decline of more than 8 per cent, taking the index to a low last seen in May 2014.
‘Current economic conditions’ fell 8 per cent, adding to the massive 16.6 per cent decline in the previous reading. ‘Future economic conditions’ bucked the trend with a rise of 1.7 per cent.
Unlike last week, confidence in financial conditions also worsened. ‘Current financial conditions’ fell 4 per cent, while ‘future financial conditions’ declined by 3.6 per cent.
‘Time to buy a major household item’ fell by 7.4 per cnet, resulting in an 11-year low. The four-week moving average for ‘inflation expectations’ was up 0.1 percentage points to 4.1 per cent.
“Concern around coronavirus and some not-so-encouraging data prints resulted in further weakness in consumer confidence last week,” ANZ Head of Australian Economics David Plank said. “Sharply weaker equity prices and the Reserve Bank of Australia rate cut probably added to the negative sentiment.”
“The cumulative fall over the last two weeks for the index is more than 7 per cent. There have been only four instances when the cumulative two-week fall was greater, emphasising the downside risks posed by current developments.”
“Fear about the near-term economic outlook is driving the weakness. ‘Current economic conditions’ has fallen more than 20 per cent over the last two weeks and is now at the lowest level since the global financial crisis.”
“This highlights the challenge facing the federal government as it finalises its soon-to-be-announced stimulus package.”
