Consumer confidence: no immediate RBA boost

Confidence fell for a second week in a row, dropping by 2.0 per cent last week; it however remains above the long-term average. ’Time to buy a household item’ was the only green shoot, rising a solid 4.9 per cent.

Current financial conditions fell by 2.7 per cent, while sentiment toward future finances was down 2.2 per cent. This weekly decline has resulted in the subindices closing below their long-term averages.

Current economic conditions dropped a significant 7.8 per cent after rising for three-consecutive weeks. It is still a touch above the long-run average. Future economic conditions fell by 2.8 per cent, which resulted in the subindex falling below the long-term average.

The four-week moving average for inflation expectations fell by 0.2 percentage points to 3.8 per cent, with the weekly reading down to a very low 3.6 per cent.

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“Weak first-quarter gross domestic product data and the soft retail figure for April have seen consumer confidence move lower over the past week, despite the rate cut from the RBA.," ANZ Head of Australian Economics, David Plank said.

"Looking back to the rate cuts in 2015 and 2016, there was no tendency for confidence to rise immediately following the move lower in rates. So it’s not particularly surprising that there has been no immediate boost from the rate cut."

"Inflation expectations readings below 4 per cent seem to have become the norm in the past couple of month, which is unique in the history of this survey and something the RBA will be taking note of.”

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