Drop after RBA hike
- Consumer confidence fell 3.4pts last week to 67.1pts. The four-week moving average dropped 1.2pts to 70.9pts.
- ‘Weekly inflation expectations’ rose 0.2ppt to 5.9%, while the four-week moving average ticked down 0.1ppt to 5.9%.
- ‘Current financial conditions’ (over the last year) decreased 8.4pts, and ‘future financial conditions’ (next 12 months) declined 1.9pts.
- ‘Short-term economic confidence’ (next 12 months) was down 2.7pts, while ‘mediumterm economic confidence’ (next five years) increased 0.5pts.
- The ‘time to buy a major household item’ subindex eased 5.0pts.
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The weekly ANZ-Roy Morgan Australian Consumer Confidence rating is based on 1,019 interviews conducted online and over the telephone during the week to Sunday. *Not seasonally adjusted.
ANZ Economist, Sophia Angala, commented:
ANZ Economist, Sophia Angala, commented: ANZ-Roy Morgan Australian Consumer Confidence fell last week to its tenth-lowest result since the series began in 1973, following the RBA’s decision to hike the cash rate to 4.60%, its highest level in over 15 years. Confidence in current and future financial conditions and in the short-term economic conditions fell to its lowest levels since late May, suggesting the RBA rate hike may be weighing on household sentiment. Confidence fell across all housing cohorts. It declined 2.1pts for outright homeowners and 2.6pts for mortgage holders. Renters recorded the largest fall (-6.1pts) though they remain the most confident cohort.
We still think another rate hike in November is more likely than not, as we expect Q3 trimmed mean inflation to exceed the RBA’s forecasts. This would take the cash rate to 4.85%, its highest since 2008, which would likely weigh on consumer spending.
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