There’s no stopping it:
Confidence was down again last week, falling 1.1%. The weakness was predominantly due to the economic conditions component of the index.
- Current economic conditions fell by 2.6%, while future economic conditions were more downbeat, falling 4.9%. Both these subindices are near their multiyear lows.
- In contrast, financial conditions were upbeat, with current financial conditions gaining 0.3% and future financial conditions gaining 0.2%.
- The ‘Time to buy a household item’ gained 0.4% after falling 3.9% in the previous reading. The four-week moving average of inflation expectations declined by 0.1ppt to 3.9% as the weekly reading fell to 3.8%, its lowest level since the end of June.
ANZ Head of Australian Economics, David Plank, commented:
“Confidence faltered again due to weakness in the two economic conditions subindices. Continued weakness in these subindices has caused poor performance of the index for some time. Labour market data last week revealed that the job market weakened last month, which is probably the reason why the economic conditions subindices have been down for the last few weeks. Confirmation that wages are still subdued may also have made households apprehensive about the economic outlook, even if it doesn’t seem to be impacting them directly via financial conditions. Renewed weakness in the weekly reading of inflation expectations will be a concern for the RBA.”
Just lovin’ those tax and rate cuts. Better give ’em more!