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Consumer Confidence drops to recessionary levels

Consumer confidence dropped 7.6 per cent last week. Among the major states confidence was down sharply in NSW, Victoria, SA, and WA, while it was virtually unchanged in Queensland.


• ‘Weekly inflation expectations’ decreased 0.1ppt to 5.6 per cent, while its fourweek moving average was unchanged at 5.5 per cent.


• All subindices fell. ‘Current financial conditions’ dropped 1.0 per cent, while ‘future financial conditions’ fell 10.1 per cent.


• ‘Current economic conditions’ declined 7.2 per cent after a 9.4 per cent loss the week before. Future economic conditions were down 4.6 per cent.


• ‘Time to buy a major household item’ dropped 14.4 per cent.

"Consumer confidence declined 7.6 per cent last week as the RBA raised the cash rate by 50 basis points. Confidence is at its lowest since early April 2020, during the early stages of the pandemic. Outside of the pandemic, consumer confidence hasn’t been this low since January 1991, the midst of the early 1990s recession." ANZ Head of Australian Economics, David Plank said.


"Reflecting the dire state of sentiment, the percentage of respondents who expect ‘good times’ for the economy over the next five years dropped to 10 per cent – its lowest level on record. So far this year household spending has been resilient despite the softness in consumer confidence. The RBA, for one, will be looking closely to see whether this divergence can continue."


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