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Consumer Confidence steady as inflation expectations surge again

‘Weekly inflation expectations’ rose 0.4ppt to 6.4 per cent last week, its highest weekly reading since June 2012. Its four-week moving average rose 0.3ppt to 5.8 per cent.


• Consumer confidence was virtually unchanged with a decline of just 0.1 per cent. Among the major states, confidence dropped in Victoria, Queensland and SA, while it increased in NSW and WA.


• The details were mixed. ‘Current financial conditions’ decreased by 2.5 per cent, its third consecutive weekly decline. ‘Future financial conditions’ rose 1.2 per cent.


• ‘Current economic conditions’ gained 6.1 per cent after a 21.1 per cent decline over the past five weeks. ‘Future economic conditions’ softened 0.6 per cent.


• ‘Time to buy a major household item’ dropped by 4.3 per cent, its third straight weekly decline.

"Inflation expectations surged 0.4ppt last week to a multi-year high of 6.4 per cent, even though petrol prices declined slightly. ANZ Head of Australian Economics, David Plank said.


"Consumer Confidence was essentially unchanged despite this, with a slight decline of just 0.1 per cent. Within the detail, however, sentiment toward ‘current financial conditions’ dropped to its lowest since May 2020.


"Consumer Confidence is very weak given the strength of employment, which we think is directly linked to concerns over cost-of-living pressures. It will be interesting to see whether the measures expected in the Federal Budget provide a boost to confidence."


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