Sep 21, 2021
Consumer Confidence inflation expectations up again
Consumer confidence increased slightly by just 0.4 per cent last week making it the third consecutive week of small gains. A fall in confidence in Melbourne, regional NSW and Queensland was balanced by increases in SA and WA
‘Weekly inflation expectations’ rose 0.1ppt, reaching a fresh pandemic-high of 4.8 per cent. The four-week moving average also rose 0.1ppt to 4.7 per cent, its highest level since November 2014.
Three of the five confidence subindices declined. ‘Current financial conditions’ gained 4.0 per cent, while ‘future financial conditions’ dropped 1.9 per cent.
‘Current economic conditions’ softened 1.3 per cent and ‘future economic conditions’ declined 3.7 per cent.
‘Time to buy a major household item’ rose 5.6 per cent.
"Consumer confidence gained 0.4 per cent nationally last week, even as Melbourne recorded its highest number of daily cases amidst anti-lockdown protests and tremors from a nearby 6.0 magnitude earthquake. Given the circumstances, sentiment in Melbourne held up quite well with a decline of just 0.9 per cent." ANZ Head of Australian Economics, David Plank said.
"Confidence remained practically unchanged in Sydney with a rise of just 0.1 per cent as daily cases started to descend."
"A more striking development this week is the rise in weekly inflation expectations to 4.8 per cent. This has pushed the four week moving average to 4.7 per cent, its highest level since 2014 – not long after the survey started collecting weekly data on inflation expectations. High inflation expectations at a time of weak wage growth could drag on overall consumer confidence if people start to worry about the cost of living."