Consumer confidence falls on global news

ANZ-Roy Morgan Australian Consumer Confidence fell 2.3 per cent last week, closing below the long-term average. The fall was driven by weakness in economic conditions, with current falling 3.8 per cent and future losing a massive 7.9 per cent.

Both economic subindices are below their respective long-term average. In contrast, measures relating to personal finances rose modestly. Current finances were up by 0.2 per cent for the week, while future finances gained 0.6 per cent.

The ‘Time-to-buy-a-major-household-item’ index fell 1.4 per cent - its third-consecutive decline. The four-week moving average for inflation expectations fell by 0.1 percentage points to 3.9 per cent.

Readings of inflation expectations have shown signs of softness over the last few weeks

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“Australian households appear to be troubled by negative global economic developments and the related equity market weakness, with sentiment toward current and future economic conditions down sharply," ANZ Head of Australian Economics, David Plank, said.

"Views about current economic conditions have fallen materially for three weeks in a row, while those for future economic conditions are at their weakest since October/November last year."

"The relative buoyancy of sentiment about personal financial conditions indicates that the tax cuts and lower interest rates are having a positive impact on households. But this hasn’t been sufficient to offset the global news flow."

"The negative view on the economic outlook is impacting inflation expectations. The past three weeks have seen weekly readings of less than 4 per cent.”

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