Consumer confidence is resilient

Consumer confidence recovered 2.5 per cent last week, following the end of thelockdown in south-east Queensland and also in large part due to the resilience of sentiment in NSW despite rising COVID-19 cases.

Financial conditions recovered after a significant fall the week before, with ‘currentfinancial conditions’ up 2.9 per cent and ‘future financial conditions’ gaining 4.8 per cent.

Economic conditions, on the other hand, softened a touch as ‘currenteconomic conditions’ lost 0.5 per cent and ‘future economic conditions’ slipped 0.2 per cent.

‘Time to buy a major household item’ gained 5.0 per cent, after last week’s 8.3 per cent fall. ‘Weekly inflation expectations’ rose 0.2ppt to 4.5 per cent, its highest level since May 2019. The four-week moving average remained steady at 4.3 per cent.

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"Consumer confidence rose 2.5 per cent last week, rising back above the neutral level of 100.This recovery was driven by a 7.5 per cent increase in confidence in Queensland as the lockdown in its south-east ended." ANZ Head of Australian Economics, David Plank said.

"Sentiment also rose by 7.1 per cent in Sydney, reflecting resilience even as daily COVID-19 cases are still rising in the city. Despite the current resilience in sentiment, the persistence of the highly infectious Delta variant means there is significant uncertainty about how things will evolveover the next few weeks."

"The jump in weekly inflation expectations is notable andsomething that may trouble policy makers if it continues to rise sharply."

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