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Consumer Confidence inflation expectations still high

Despite Australia’s Q3 CPI last week revealing broader inflationary pressures than expected, ‘weekly inflation expectations’ fell 0.1ppt, but they remained elevated at 4.9 per cent. The four-week moving average was steady at 4.8 per cent.


Consumer confidence rebounded 1.5 per cent and reached its highest level since early July 2021. Confidence jumped in Sydney and Melbourne but dropped in Brisbane, Adelaide and Perth.


Four out of five of the subindices gained. ‘Current financial conditions’ rose 6.5 per cent and ‘future financial conditions’ gained 1.7 per cent.


‘Current economic conditions’ increased slightly by 0.8 per cent, while ‘future economic conditions’ bucked the trend and dropped 3.8 per cent.


‘Time to buy a major household item’ improved 2.4 per cent. 

"‘Weekly inflation expectations’ is still close to its recent high, dropping just 0.1ppt to 4.9 per cent." ANZ Head of Australian Economics, David Plank said.


"The sharp quarterly rise in fuel costs of 7.1 per cent in Australia’s Q3 CPI likely had a significant impact on householders’ inflationary outlook during these past few months."


"The close relationship between ABS’s Wage Price Index and inflation expectations means it is a key indicator. Critically, however, inflation expectations point to wages growth that is still below the level the RBA has said is needed to ensure inflation will sustainably be in the target band."


"Consumer confidence jumped 1.5 per cent last week, as all cities came out of lockdown. Confidence was up in NSW (2.0 per cent) and Victoria (5.5 per cent), which more than offset the falls in Queensland (-0.6 per cent), South Australia (-4.3 per cent) and Western Australia (-5.6 per cent)."




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