Aug 31, 2021
Consumer confidence dropped 1.8 per cent last week as COVID caseloads remained elevated in NSW and Victoria. Daily cases are expected to peak in the coming weeks as vaccination rates are rising steadily across Australia.
Four out of the five subindices registered losses last week. ‘Current financial conditions’ fell 2.3 per cent, a second consecutive decline. ‘Future financial conditions’ dropped 4.0 per cent.
‘Current economic conditions’ softened 0.7 per cent, while ‘future economic conditions’ gained 1.9 per cent.
‘Time to buy a major household item’ worsened 3.2 per cent after rising for three straight weeks. ‘Weekly inflation expectations’ surged 0.3ppt to 4.7 per cent, its highest level since the Wentworth by-election in October 2018. Its four- week moving average increased 0.1ppt to 4.5 per cent.
"Consumer confidence declined 1.8 per cent last week despite rising vaccination rates and reasonably good economic news in the form of the 0.7 per cent rise in Q2 GDP." ANZ Head of Australian Economics, David Plank said.
"Sentiment dropped in Sydney (-5.3 per cent), Melbourne (-0.8 per cent) and Brisbane (-2.9 per cent), while Adelaide (+5.0 per cent) and Perth (+2.3 per cent) lifted."
"The most notable thing in this week’s release is the jump in inflation expectations to its highest level in almost three years."
"The weekly reading can be volatile so we need to be a bit cautious about overplaying the move, but if sustained it will cement the sharpest jump in inflation expectations since we moved to collecting the data on a weekly basis."