Broad decline
- Consumer confidence fell 4.4 points last week to 71.2 points. The four-week moving average eased 1.2 points to 74.2 points.
- ‘Weekly inflation expectations’ ticked up 0.1 percentage points to 5.9 per cent, while the four-week moving average rose 0.1 percentage point to 5.7 per cent.
- ‘Current financial conditions’ (over the last year) decreased 2.2 points, and ‘future financial conditions’ (next 12 months) dropped 5.5 points.
- ‘Short-term economic confidence’ (next 12 months) declined 2.8 points, while ‘medium-term economic confidence’ (next five years) was down 4.1 points.
- The ‘time to buy a major household item’ subindex eased 7.6 points.
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ANZ Economist, Sophia Angala, commented:
ANZ-Roy Morgan Australian Consumer Confidence fell 4.4 points to 71.2 points last week, its lowest level since mid-June, with all subindices declining. The recent escalation of conflict in the Middle East, renewed inflation risks and a gradual easing in labour market conditions in June may all have weighed on confidence.
Weekly inflation expectations ticked up to their highest level since mid-June, ahead of the Q2 CPI release due Wednesday 29 July. We forecast trimmed mean (underlying) inflation to rise 3.7 per cent y/y, a touch below the RBA’s forecast of 3.8 per cent y/y. Lower-than-expected inflation and the broader slowing of activity should see the RBA cash rate remain at 4.35 per cent at the August meeting. However, a hike cannot be ruled out, either in August or November.
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