Drop, after July CPI
- Consumer confidence fell 2.6pts last week to 74.9pts. The four-week moving average was unchanged at 76.0pts.
- ‘Weekly inflation expectations’ was unchanged at 6.1%, while the four-week moving average rose 0.2ppt to 5.9%.
- ‘Current financial conditions’ (over the last year) was flat, and ‘future financial conditions’ (next 12 months) declined 0.8pts.
- ‘Short-term economic confidence’ (next 12 months) decreased 5.5pts, while ‘medium-term economic confidence’ (next five years) eased 3.5pts.
- The ‘time to buy a major household item’ subindex dropped 3.4pts.
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ANZ Economist, Sophia Angala, commented:
After four consecutive weekly gains, the ANZ-Roy Morgan Australian Consumer Confidence index fell 2.6pts to 74.9pts last week. The decline was broad-based but was led by decreasing confidence in future economic conditions. This may have reflected last week’s stronger-than-expected July CPI release. Although weekly inflation expectations were unchanged last week, the series has trended higher in recent weeks.
Given persistent inflation and the resilience in household spending, we now expect the RBA to hike the cash rate by 25bp to 4.60% in November. Against a backdrop of weak consumer confidence, a November rate hike is expected to weigh further on consumer spending over the near term.
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