Feb 07, 2023
Consumer confidence plunges
Consumer confidence dropped 5.5 points in the week to February 12, hitting 78.1 after a 3.2 point fall the week before. This is its lowest reading recorded since early April 2020. Confidence declined across all five mainland states for a second week in a row.
‘Weekly inflation expectations’ rose 0.1 percentage points to 5.5 per cent. Its four-week moving average remained unchanged at 5.4 per cent.
Four of the five confidence subindices were down. ‘Current financial conditions’ fell 4.9 points to just above the record low seen in late March 2020. ‘Future financial conditions’ dropped 3.7 points.
‘Current economic conditions’ plunged 9.3 points, its third-straight weekly decline. ‘Future economic conditions’ bucked the trend with a 1.2-point rise. ‘Time to buy a major household item’ dropped 11 points.
"Consumer confidence fell after the Reserve Bank of Australia raised interest rates by 25 basis points," ANZ Senior Economist Adelaide Timbrell said. "This was the sharpest weekly drop in confidence since the June 2022 RBA meeting, which delivered the first 50-basis-point cash-rate hike of the current interest rate cycle."
"The average confidence among people paying off their mortgages fell sharper than other housing cohorts, by 10 points, to its lowest since early April 2020."
"Confidence among homeowners and renters also fell, by 5.2 points and 2.9 points respectively. The subindex for whether ‘it is a good time’ to buy a major household item dropped to its lowest since April 2020."