ANZ-Roy Morgan Australian consumer confidence eased by 0.9 points last week, landing at 83 points.
The four-week moving average also saw a slight decline, down by 0.4 points to 82.8.
The fall in confidence was primarily driven by a sharp 6-point drop in the “time to buy a major household item” subindex.
Despite the dip, confidence remains buoyed by broader economic factors.
Weekly inflation expectations declined by 0.4 percentage points to 4.7%, marking their lowest level since January 2022.
The four-week moving average also dropped to 5%.
“It’s been a bumpy path down for inflation expectations since the peak of 6.8% in November 2022,” ANZ Economist Madeline Dunk (pictured above) said.
This aligns with other data, such as the NAB business survey’s price measures, which point to inflation settling around 2.5%.
The ANZ-Roy Morgan report showed some volatility in financial conditions.
While “current financial conditions” dropped by 1.9 points, this subindex is still up by 5.2 points over the past two weeks and has risen by 9.6 points since July.
Meanwhile, “future financial conditions” increased by 0.5 points, indicating cautious optimism for the next 12 months.
The outlook for the Australian economy over the short and medium terms improved slightly.
“Short-term economic confidence” (next 12 months) rose by 0.9 points, while “medium-term economic confidence” (next five years) was up by 2.1 points. This suggests consumers are feeling more positive about the economy’s trajectory.
“Despite some volatility in the week-to-week data, it appears the Stage 3 tax cuts are supporting confidence,” Dunk said.
The biggest decline was seen in the subindex for “time to buy a major household item,” which fell by six points. This suggests consumers may be holding back on large purchases amid broader economic uncertainty, despite improving financial conditions and falling inflation expectations.
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