Consumer confidence craters to four-year low

Amid the devastating bushfires, the ANZ-Roy Morgan Australian Consumer Confidence index has fallen 1.7% to 106.2 in the week ended 5 January, to its lowest level in more than four years:

Confidence fell 1.7% last week, to its lowest level in more than four years. A drop in confidence at the start of the year is unusual and almost certainly reflects the impact of the catastrophic bush fires over the weekend.

Consistent with this, the weakness in confidence was due to a big drop in the economic outlook, while sentiment toward personal financial circumstances actually rose. ‘Current economic conditions’ were down by a massive 12.9%, while ‘future economic conditions’ fell 8.1%. Current economic conditions are at their lowest level since the global financial crisis, while sentiment toward the future economic outlook is at its lowest level since 1994.