Household spending declines.
While consumer confidence eased 1.6% this week, on the back of a 0.9% decline in the prior week, details from the latest ANZ-Roy Morgan data were largely negative with sentiment around the ‘time to buy a household item’ sub-index posting the sharpest declines.
The ‘time to buy a household item’ fell 3.6% last week largely unwinding the previous week’s 4.2% jump. Inflation expectations edged back up to 4.5% on a four-week moving average basis.
Households’ views towards current financial conditions slipped 0.8% following a 3.1% decline previously. Consumers were also pessimistic about future financial conditions, with a fall of 2.3%, unwinding much of the 2.8% rise in the previous week.
Commenting on the results, ANZ’s head of Australian Economics, David Plank (pictured) said it followed the decline in global and domestic equities with markets spooked about a possible escalation between US and China in the trade space.
“Aggregate confidence in economic conditions has fallen to its long run average for the first time this year. The fall in economic sentiment likely reflects the uncertainty generated by the dispute around global trade policy and the impact this is having on equity markets.” However, aggregate confidence in financial conditions remained more elevated and is still well above its long-run average with the ongoing strength of the labour market a likely a factor in this, Plank said.