Consumer confidence declined 2.4% last week. This was its seventh weekly decline, longer than the six weeks of continuous decline seen during the first wave of the pandemic. The current decline has been less severe, however, as the index has fallen a bit more than 11% over these seven weeks compared
to the 40% decline seen in the first wave.
Financial conditions were mixed, with ‘current finances’ gaining 2.7% and ‘future finances’ declining 1.9%.
Economic conditions were also mixed. ‘Current economic conditions’ plunged by 8.2%, its eighth weekly decline. This sub-index is now down by 30% over the past seven weeks compared to the fall of 60% in the first wave. ‘Future economic conditions’ ended on a positive note, gaining 2.2%.
‘Time to buy a household item’ declined 8.6%. ‘Inflation expectations’ was stable at 3.3% (four-week moving average).
ANZ Head of Australian Economics, David Plank, commented:
“The move to Stage 4 restrictions in Melbourne put further downward pressure on sentiment last week, with confidence falling to its lowest level since the last weekend of April. Not surprisingly, confidence is weakest in Melbourne. The resilience of sentiment toward financial conditions continues to be a feature of the survey, but only in a relative sense as it is still low in absolute terms and speaks to a likely reluctance on the part of households to spend”.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
