Consumer confidence hits 2020 high

Consumer confidence improved for the second week in a row. The overall index rose 1.7 per cent, with all the subindices except ‘current financial conditions’ gaining. With this, confidence is now at its highest level for 2020.

‘Current financial conditions’ declined 0.6 per cent, while ‘future financial conditions’ increased by 2.0 per cent. ‘Current economic conditions’ improved by 2.9 per cent, while ‘future economic conditions’ rose by 2.0 per cent.

‘Time to buy a major household item’ grew by 1.5 per cent. While the four-week moving average of ‘inflation expectations’ was steady at 3.5 per cent, weekly inflation expectation surged to an eight month high of 3.8 per cent.

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"Consumer confidence rose this week as Australian’s perception of their economic and financial prospects continued to improve," ANZ Head of Australian Economics David Plank said.

"The GDP release last week suggests the economy is set for an earlier than expected return to pre-COVID levels, something that would have buoyed sentiment."

"The headline consumer confidence is now at its highest level in 2020. In fact, this is the first time in 18 months that confidence is higher than it was a year prior. ANZ Research believes this bodes well for year-end spending. The jump in weekly inflation expectations to an eight-month high is interesting."

"This aspect of the survey can be very volatile, so we will need to wait to see if the jump is confirmed by subsequent surveys. If it is, then household expectations will be at odds with official forecasts of very subdued inflation pressures."

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