Consumer confidence falters

ANZ-Roy Morgan Australian Consumer Confidence fell 1.0 per cent last week. The fall was accentuated by a sharp decline of 7.1 per cent seen in the ‘time to buy a major household item’ sub-index.

Current finances fell by 1.2 per cent, the second decline in a row, while future finances gained 1.7 per cent. Both the indices are well above their long-term averages.

Current economic conditions gained 1.4 per cent after five straight declines. Future economic conditions gained 1.8 per cent for its third consecutive increase.

Australians are still wary of the economic outlook considering both the subindices are below their long terms averages.

Inflation expectations were stable at 4 1.4 per cent on the four-week moving average.

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“A steep fall in the ‘time to buy a major household item’ led to a decline in the overall confidence index to just above its long-run average," ANZ Head of Australian Economics, David Plank said. "This sub-index fell to its lowest level since April and is well below average."

"It seems tax cuts, lower interest rates and the associated turn in the housing market are not yet motivating people to consider a major household purchase."

"Interestingly, sentiment toward the economic outlook improved despite the weak second-quarter gross domestic product report."

"In saying this, we need to be mindful that sentiment toward the current economic outlook had declined for five consecutive weeks to its lowest level in more than two years. So the bounce in this sub-index is only modest.”

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