Dec 15, 2020
Consumer confidence slips
Consumer confidence ended the year on a downbeat note, as Sydney’s spike in COVID-19 cases saw confidence fall 2 per cent. Most subindices were lower, with the exception of ‘future financial conditions’.
‘Current financial conditions’ weakened 2.2 per cent while ‘future financial conditions’ bucked the overall trend and grew 0.9 per cent. ‘Current economic conditions’ deteriorated by 4.6 per cent, while ‘future economic conditions’ worsened by 3 per cent.
‘Time to buy a major household item’ declined 1.4 per cent. The four-week moving average of ‘inflation expectations’ rose to 3.7 per cent, a level last seen in April.
"The emergence of a major COVID-19 cluster in Sydney has dampened consumers’ otherwise positive sentiment," ANZ Head of Australian Economics David Plank said. "In Sydney, confidence was down 5.3 per cent in its sharpest weekly drop since July."
"In the rest of New South Wales, it moderated by 1.9 per cent. Confidence weakened in Victoria (down 2.9 per cent), along with Queensland and Northern Territory. The lockdown of the suburbs around Sydney’s northern beaches and the state border closures have reminded people that material downside risks remain."
"The ongoing trend of higher inflation expectations has the four-week moving average touching the level last seen in April. As we’ve noted, this lift is consistent with the likely bottom of inflation."