Consumer confidence bounces back

Consumer confidence rose 1 per cent last week, led by improved confidence in ‘future economic conditions’ and ‘time to buy major household items’. Sentiment across the other sub-indices was weaker.

‘Current finances’ declined by 0.6 per cent, while ‘future finances’ contracted by 2 per cent. ‘Current economic conditions’ declined by 0.7 per cent, while ‘future economic conditions’ rose by 4.1 per cent.

‘Time to buy a household item’ rose by 3.9 per cent last week. The four-week moving average for ‘inflation expectations’ was steady at 3.3 per cent, while the weekly reading softened 0.4 percentage points to 3.2 per cent.

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"The consumer confidence survey was carried out ahead of the announcement of the plan for Victoria to emerge out of the lockdown," ANZ Head of Australian Economics, David Plank said.

"Even taking this into account, the uptick in confidence comes as a positive surprise. We had thought the release of the weak second-quarter GDP report during the week, with the media in particular focusing on the confirmation that Australia is in recession, would have dampened sentiment overall."

"The jump in ‘future economic conditions’ may indicate that a number of people think the economic situation is close to the bottom. Indeed, sentiment in this category is now close to the neutral level of 100."

"People are much more negative about the near-term economic outlook, however, though they are positive about their own current financial conditions."

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