Consumer confidence recovering

Consumer confidence increased by 1.3 per cent as great news on the labour market boosted sentiment despite the emergence of a new COVID-19 cluster in Sydney.

‘Current financial conditions’ rose 4.9 per cent after falling for the past three weeks, while ‘future financial conditions’ softened 0.8 per cent.

‘Current economic conditions’ also gained 4.9 per cent, while ‘future economic conditions’ rose 0.5 per cent.

‘Time to buy a major household item’ declined 1.8 per cent.‘ Weekly inflation expectations’ rose by 0.3ppt to 4.2 per cent, pushing the four-week moving average up 0.1ppt to 4.0 per cent. This is the first time the four-week moving average has been at or above 4.0 per cent since April 2020.

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"The strong labour market recovery provided a boost to consumer confidence with the index gaining 1.3 per cent last week. The unemployment rate fell to 5.1 per cent in May, reaching its lowest level since February 2020 - that is, before the pandemic

started." ANZ Head of Australian Economics, David Plank said.

"This strength in the employment data overshadowed news about the emergence of a COVID cluster in Sydney. Confidence in the city rose by 5.2 per cent, while in the rest of New South Wales it gained 2.8 per cent."

"We know from recent experience, however, that sentiment will likely be impacted negatively if the outbreak worsens and greater restrictions are imposed."

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